Wednesday, October 27, 2010

State of the Stock Market - 10/27/10

Another choppy day today on Wall Street, as stocks started the day lower and stayed lower for much of the session, but they did bounce back into the close to finish near their highs for the day.   The Nasdaq outperformed the S&P all day today, finishing with gains on the day.   The S&P finished basically flat.  

Technically, once again no real damage was done today and the market remains in an uptrend, albeit one that is chopping around right now and not going anywhere.   The S&P tested its 9 day once again today and was below it a good bit, but ended up closing above it so the beat goes on.  My breadth numbers continue to flash their warning signs (my main one does look like it will turn bearish today, but just slightly so) and I continue to look for a breakdown soon, but until it comes, you have to respect the trend.    I would really like to see a heavier volume day soon with lots of breakouts to counteract these bearish signals.

If you read yesterday's summary, you may remember me mentioning one particular stock that I was watching after-hours for the earnings reaction.  Well, that stock was SIMG, and I did put a quick tweet out about it around 4:30 or so.  At that time, I knew it had blown out its earnings ($0.18 vs $0.05 est) and was actually halted for trading.   I didn't know where it would open, but I was hoping to get in if possible.   When it did open trading after-hours, it opened around $5 and just moved higher from there.   I waited and that was my mistake.   Buying a stock that is up a huge amount after-hours is one of the hardest things to do, simply because the after-hours tend to be very volatile, but often times it is the right move.  Sometimes, I will wait until after the conference call to see if the stock holds its earnings pop when all of the news is out.   SIMG held on pretty well and when the after-hours session closed around 8:00, it was trading at $5.45-5.50.   I put a limit order in around 7:45 at the bid ($5.40) and went away.  I was not filled.   I let five cents get in the way of a very nice pop today, which is just plain stupid on my part.  

As it is, I would certainly keep this stock on any watchlist that you have to see if it will consolidate and rest a bit, allowing for a potential second buy opportunity over the next few weeks.  It has a catalyst that could push it much higher from here as we move forward, although the last quarter's earnings were also good and it didn't do much off of its earnings pop, so we'll have to see.  There should be many others like SIMG over the next few weeks and I will try to keep you informed as I see them - tomorrow in particular is a very big after-hours session with lots of reports coming, so be alert.   I went over some of these possibilities in this weekend's video. 

Overall, I am watching some stocks here on the long side as the market continues to hold up.  Two stocks that I tried to enter late today were ZSTN and SMTX, but for some reason Scottrade won't let me put online orders in for those stocks (I have to call my local branch) so I am probably out of luck because I don't have the ability to call my local branch at all times - thanks Scottrade.   Anyway, keep your eyes open here for a possible breakdown but until it comes respect the trend, which remains up.   Good luck Thursday. 

1 comment:

Anonymous said...

Hello Mac

Try using Interactive brokers (IB) as your online broker, they are very inexpensive and will have no problem entering trades.
Its much better than what I had previously, TD, (They too expected me to call them for certain trades, and by the time is did, my cost would be much higher), so i left them and went to IB