Wednesday, April 20, 2011

State of the Stock Market - 4/20/11 - "Hopeful for Follow Through"

Big gains today on Wall Street, as positive earnings from INTC and VMW pushed the Nasdaq higher and the other indices followed.   Most of the action took place when the market gapped up, and from there it was mostly sideways action on the Nasdaq and S&P.   Volume was heavier.

Technically, today was nice but there still is some work to do for the indices as you can see with the charts below.   The main signal and one secondary signal turned neutral today so signal-wise, the market is neutral across the board.   I would give the benefit of the doubt to the bulls however.
S&P 500

Sector-wise, semis took off nicely on the INTC news but retail had a weak breakout which is a bit worrisome.   Financials continue to lag greatly which is another concern.

As for my trading, I've been on a personal slump here for over a week and it is a bit frustrating.   The three longs today were up but not as much as I would have hoped given the overall action.   RAX could not finish at new highs and closed weak, which is disappointing given the VMW news.   SPRD barely finished higher even with the INTC news.   I passed on some other stocks last night like RHT and CRM after-hours and those both had gains north of 5% today.   TRS flashed a pocket pivot yesterday and I had it on the list after-hours yesterday but I passed as it dropped about $1 in that session.   Today it was up 12%.  I'm just in one of those bad grooves right now where nothing seems to go right.  Hopefully I'll get out of it soon - I'm trying not to press and that's important when you go through a slump, no matter if it's a short or long period of time.  

Certainly today's action was bullish but in the heart of earnings season, you do need to take all technical action with a grain of salt.  It's a perfect environment for whipsaws to occur in and I hope we don't see many over the next week or so.  Both the S&P and Nasdaq closed right below key resistance and we need to see some follow-through tomorrow before an "all-clear" signal can be given.  I would definitely not be shorting the indices right now - stick with charts on the long side that are setting up and hopefully you catch some movers.   Paying attention to the earnings plays makes sense as well.   Take care and good luck Thursday. 


hannah said...

We should see some big follow-through with Apple beating estimates and up 3.5% after hours. Apple should bring the entire market up past the near term resistance.

Are you going to post your pocket pivot and long set-ups soon? Those are pretty good.

Mac said...

Hi, Hannah. Most of the charts I am watching closely are posted in comments on Twitter. However, for tomorrow, some I am watching are BSDM, DBLE, GSIG, CIS, and CYD. DTLK is an earnings play I entered AH.

hannah said...

Thanks, Mac. BSDM is interesting, forming a flag on the weekly and no signs of distribution on the fade. Looks about ready with the pocket pivot today.

Clay Franklin said...

I really enjoy reading your updates. I am also long RAX for about a year. I bought Google and Apple just befoe the earnings. Lots of goog little apple. I am just starting out learning all the technicals and making good trades. First thing I did was get 2 Cabot newsletter and loose half of all my gains in all of 2010. I get IBD on Sat. Due to my recent losses, I have been timid in my positions. It's time to reevaluate my positions. SNDK, RAX, BEXP, IL, GOOG, AAPL, AMZN, SLW (I don't really like miners anymore so getting out when it's not a loss.). Also looking at some US coins for gold exposure. The ETF's seem a bit less secure GLD SLV). I like the idea of learning about options for these though and trading in general. Thanks again really like your analysis.