Wednesday, March 23, 2011

State of the Stock Market - 3/22/11 - "Back to Neutral"

We had a volatile session today on Wall Street, as the market sold off for the first hour or so of trading before finding a bottom and grinding higher for the rest of the session.   The Nasdaq was able to clear Monday's highs briefly but a late pullback kept them below those levels on a closing basis.   Volume was below-average but at least heavier than Tuesday's levels, although considering Tuesday was the lowest volume day of the year, that wasn't real hard to do.

Technically, the markets are in quite the interesting position here.   I said yesterday that the action was bullish Tuesday, but with so much resistance above, I was still bearish overall.   I thought my outlook was correct this morning as the market saw more selling, but the bounce was impressive.   It was not impressive enough, of course, to take us through that resistance that still lies ahead.   I am more bullish than I was at the beginning of the week, but overall I would say I am neutral.  There is still some work to do for the bulls before I would advise getting aggressively long.

Nasdaq
Russell 2000

I did make one trade last night after-hours, entering REDF at $6.65.   Due to the volatility of today's session, I ended up being stopped out this morning at $6.58 for a 1.5% loss.   It started the day very well but there was a shake out early and I was part of it.   I was also stopped out of my QID position near the end of trading today at $53.98 for a 1.08% loss.   I tightened my stops as the market moved lower this morning and it ended up getting hit.   I still do have my BGZ position but that's it right now. 

I'll try to do a quick video tonight with stocks that have held up well through this correction, because if the bulls are about to take back control of this market, those are the stocks you should be watching.  Very few moved today, but maybe they're waiting for a bigger overall market breakout.   
FCX
Charts from Telechart, Courtesy of Worden Brothers, Inc.

Overall, I would remain open to anything at this juncture.   There is still resistance ahead so it's not a given we are starting a new rally here, but the past two sessions have been positive for the bulls.   As I always say, be prepared.   Good luck Thursday.

1 comment:

Anonymous said...

hi mac
it may climb up slowly but daily. every morning correction is an opportunity

i agree mac that mid-long term is bearish but short term, im very bullish at least we have close above monday's DH.

mini-me