Wednesday, November 10, 2010

State of the Stock Market - 11/10/10 - "9 Day Holds Again"

A good day today on Wall Street - stocks tried to follow-through on yesterday's selling but once again, the bears couldn't do much.   Stocks found a bottom about an hour into the session, finding support once again at their 9 day moving average, and from there bounced back to take back all of the losses.   Stocks finished the day with decent sized gains and closed at their highs for the session.   Volume was lower than yesterday's totals.

Technically, the beat goes on and I will repeat myself for the umpteenth time - the 9 day moving average is acting like a floor for this market and until it is broken, keep riding the trend.   That's all there really is to say.   It was nice to see the market bounce back once again and perhaps this pullback is over.   We'll have to see over the next few days.

 Chart from Telechart, Courtesy of Worden Brothers, Inc.

As for me, I am back in cash after having my stops hit in BORN and ASTI.   I have not had a fun few days - getting whipsawed around never is fun.   This is the only thing I don't like about the market right now - I see a lot of very volatile patterns being formed the past two or three days, particularly in the small caps.   When you aren't at your computer all day, it makes handling the positions very tough.

At the same time, I do see many nice flag patterns being formed here, so I am certainly hopeful of further upside over the next few weeks.   If I have time tonight, I'll try and share some of those.   Take care and good luck


SAL said...

Mac how would u handle ASTI now? By now i mean they announce a public offering.. Sell below the twenty cent mark??

Esther said...

Try the 13 day ema on the SPX. And thanks for the continuing excellence of your blog.