DJIA mirrored the rally and fall of the SPX today intraday...overall though, it is still a weaker index...
QQQQ showed the most strength yet again...but it too faded as oil ended relatively strong on big volume. I wonder how much higher the Q's can go....
USO, as u can see has a bullish tail from the late day rush. But overall, with a war in progress, was weak. I expected it to be much stronger earlier in the day. But the late day rally and huge hit to the market does have me on high alert.
XRT was the strongest hit by the oil rally today. Some retails stocks made huge moves throughout the entire day to see it all disappear as they ended in the red. The market needs this huge component to be strong if it hopes to keep this rally going. Remember that tech is faily closely tied with retail. Fundamentally, it makes much sense that if XRT falls, so will tech and the rest of the market.
XLF did faily well today but was again unable to break resistance. It needs to break resistance soon to break out of the triangle
Analysis: Despite being an up day today, it was not a evry good day. I really didn't like the weakness the market showed once oil showed signs of strength. If the market is to rally higher, i feel it needs to show that if oil prices are to stay at these levels that it can still rally. If not, i have to feel that this is a sucker rally. It would show that this rally is more a lack of sellers than a true increase in buyers...those rallies don't last long...i have a bad feeling that we can drop down hard and kill this rally if we see any strength in oil. midday i was very very close to buying a long in tech or a short in materials. I really wanted to chase, but being disciplined, i held off from openning any new positions. It turned out to be a good thing. And again at the end of the day, after SPX turned negative, i was looking to buy a long in tech but decided again not to as i felt that it would be best not to take on more risk at such a volatile time (especially since i already have a few open positions). As mentioned yesterday, i was expecting a consolidation or a small orderly pullback for the markets today...I would have felt much more bullish if we had either of those. Both would have been much better than seeing a huge fall in retails and the entire market late in the day off of a quick spike in oil. Shows how weak and fragile this market truly is.
Game Plan: Depending on the action tomorrow, i might add a long. I will be looking at oil and trying to stay calm if the market falls. But overall, i am giving the market a bullish stance until we break back below the breakout level. I would turn more bullish if we were to see a good day in retails to continue its uptrend and a breakout in the XLF
Conviction Buy List:
Strong Retail (shld, rost, nile, amzn)
Some Financials (ibn, bk, mbi)
Pharma (bmy, ilmn)
Tech (msft, aapl, goog, rimm, ibm, vmw)
Exchanges (nyx, ndaq, ice, nmx)
Conviction Sell List:
Transports (osg, fro, ba, unp, csx)
Some Energy (anr, slb, apa, nov, bhi)
Materials + Mining (clf, wlt, abx, cx, pcu, abx, nem, pkx)
Agriculture (agu, mon)
Weak Financials (leh,mer, nly)
Chinese Stocks (snda, yge, ctrp, ldk)
No comments:
Post a Comment