Tuesday, November 30, 2010

State of the Stock Market - 11/30/10 - "Support Holds Again, But Still Going Nowhere"

Maybe a shorter post today because our power was out at work today so I was completely disconnected from following the intraday action and don't really have a good feel for what happened.   The market was obviously down with the Nasdaq leading the way, and we saw no follow-through to yesterday's reversal off the morning lows.  At the same time, it wasn't like the bears killed it today - stocks once again bounced off their lows with the S&P testing that key 1173 area once again and holding.   In my opinion, this remains a market full of weak bears and weak bulls, and until one shows some ability to control trading for more than a day, we will continue to chop around going nowhere. 

There are a few bullish charts I see right now which should give some hope to those going long right now. Both gold and silver were up today, and in the face of a weak market and another positive session for the dollar, that is nice for the bulls to see. 

Chart from Telechart, Courtesy of Worden Brothers, Inc.

With the dollar very much extended, I continue to think we're more likely to see the next move go up rather than down.   It's not certain - just more likely - and I don't necessarily see a big move anyway.   I continue to believe we will see a choppy, frustrating rest of the year overall.   For the bears, I would look to short some below 1174 on the S&P, as a break of that level could really crack things open, but I am not anticipating that move.   I'll wait for it.  

Be careful out there right now - we have a market that isn't really going anywhere.   Having a strong opinion one way or the other could get you in big trouble at this juncture, so keep an open mind and react when the market starts moving again.   Above 1200 on the S&P and you go long.  Below 1173 and you go short.  In the meantime, doing nothing is probably best.   Take care and good luck Wednesday.  

** Still no official "U.S. Mail" response from Scottrade today - the fifteenth business day since they told me I would be contacted in seven to ten business days.   Are there any customer service awards that I can nominate them for?

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