Thursday, January 26, 2012

Down Day, But Stay Bullish Until Support Levels Are Broken

We did see some selling today on Wall Street along with some heavier volume, but considering the move up we've had, I don't think that's that big of a deal.   Support via the nine day EMAs still did hold today and although I wouldn't mind the market putting in a very quiet session tomorrow to rest further, it is possible days like this are all we may get in terms of rest.   It's been since December 30 that the Nasdaq closed below its nine day EMA and December 19 since the S&P did the same.   As long the nine day continues to hold on a closing basis, I have to remain bullish. 

Nasdaq
S&P 500

Patience is one of my weaknesses as a trader but I am working on it as best I can.  I held all my longs today and was only stopped on one (RDC).   I actually had a nice day via YNDX, OCZ, and EFII and will continue to hold them as long as the market doesn't break these levels.   If that happens (a breakdown), then I may go into more of a cash mode, but I don't want to predict when that happens.   This may very well be the type of slow, deliberate rally that we all were clamoring for over the past year and I don't want to miss it by being impatient and selling positions too quickly.   I have already made that mistake several times this year.   Of course, now that I write this, the market probably will tank tomorrow, right??

Here are a few names I am watching for tomorrow, although I don't really want to take many more positions on as I am almost full.   In addition to the charts below, I think TLB, ASIA, NTCT, INSM, and CISG are forming very nice flags but in these cases, I think a few more days of rest would help tremendously.   I also like VNET as a potential breakout play.  

ENZN
IDIX
JAZZ
MIPS
NLST
STMP
All Charts from TC2000, Courtesy of Worden Brothers, Inc.

Good luck Friday - let's see if the market can brush off today's selling and either rest or move higher into the weekend.  If things change, I will be ready but for now, let's give the bulls the benefit of the doubt - they've earned it.

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