Friday, March 18, 2011

State of the Market - 3/18/11 - "Another Umimpressive Session"

We saw a "bounce" today on Wall Street, but much like yesterday, it was a very weak one with stocks closing at their lows for the session.   The day started with a gap up, but the S&P and Nasdaq both did nothing but drift lower from there and both ended up with only small gains.  The Dow has acted better than the other two main indices the past two sessions, but it was rejected at its 9 day moving average today as well.  Volume looks like it will be lighter.  

All in all, it was a very poor session given that supposedly good news preceded the opening bell via the G7 intervention and the Libya cease-fire.   When a market that is deeply oversold can't hold onto a rally when "good" news comes out, it tells you a lot about the current state of affairs.

I go into this weekend 100% in cash as I don't see any reason to put positions on before the weekend, but I am looking closely for shorts and will likely start seeing some good setups this weekend in my scans.   I mentioned 2680 yesterday as a "gift" if we get there, but the action the past two days has been so weak that 2680 might be a pipe dream.   It's going to take a major, major effort from the bulls to get the market over that level, and even if it for some reason happens, there is still a lot of resistance above that as well.

This all paints a picture of a market that is in a correction, one that looks like it wants to continue for the foreseeable future.   Hopefully you have been disciplined and stayed out of this market, as it is not smart to be buying these dips at this point.   Since we did technically rally the past two sessions, there may be some opportunities to get involved on the short side soon, and I will share those if I have time this weekend.   Enjoy the break and take care.


intrinsic said...

Im getting a feeling that the markets got more surprises for us in the coming weeks

Anonymous said...

hi mac
volume is heavy and the DC is above wednesday's DO/DH. however, i squared longs in the morning section, that i longed when dow moved into 11650 oversold zone. any further bounce is not my business and i will start seeking short position again. good luck and discipline will save us. a very nice trading week indeed.

fyi, "sell" signal still on my systems, no reversal yet.