QQQQ at good support after lagging SPX today to close slightly lower...
IWM is also at good support as it made a 1% drop, making it the laggard of all major averages...but with very low volume
MDY falling onto the uptrend support as it again traded sideways with very low volume...
XLF dropped nearly 2 % today but might be making a rectangle pattern...
USO got a very nice gapping pop today with very bullish volume...it was also able to close at its highs which happens to be an area of some resistance...
UUP dropped helping USO today...it is a at a point where if it breaks, it can easily close the gap window...
XME....we have seen mining stocks, like all other commodities have jumped higher because of dollar weakness lately. Here can we can see that it is hitting strong resistance. Might this hint that the dollar might continue its rise soon?
PPH...strong sector i see technically...support just below today's levels make for a good industry to start looking for longs.
Analysis: Big headline of the day is the rise in the SPX and DJIA despite a huge rally in oil and a big fall in the dollar and a rise in the euro. I have been hoping for a low volume pullback to the trendline at SPX, a dollar falling, and oil rising and today i got all 3. Unfortunately, somehow the SPX continued to rise even as oil fell. An ideal move would have been a morning gap up to the trendline on the SPX, then continued weakness to close much lower near yesterday's close as oil rebounds and the dollar falls. Today we didn't get that...Today's action confused me a whole lot. So much so that i liquidated all my assets. As technicals still look beautiful if looking at individual charts, it didn't seem wise to sell anything, but the conflicting signals over the course of the day made me feel that its best to be in cash. I shall wait for clearer signals tomorrow as i will likely head into the weekend without any positions. Financials will be key as it needs to hold support for the market to continue rising. Also very important is the action in SPX as it is still in between resistance and support areas. My theory on today's rise in both oil and the market is that oil's bounce was a short selling rally with big volume but no lasting power. Traders know this and also feel confident that the fed or Mr. Paulson might come in to give a boost to the economy as early as this weekend (most likely wth FNM or FRE). It seemed very much like smart money buying in on inside information. I don't know what else to make of the move higher today. With today's oil and dollar move, i would have felt kinda bullish to just see the DJIA down 100 points, but to actually end positive is more than strong, its extraordinary. Definitely the first time we had strong relative strength vs. oil in many many months. An idea i have been hearing around is that today's rally in oil is positive for the markets as it might mean strengthening of the global market. A possibility...i guess...espeically since oil is down to a level that is manageable and not so expensive that it totally damages the American consumer (evidence is bullish candle in RTH today).
Game Plan: Sidelined tomorrow as i try to make sense of the market some more. Tomorrow's candle will either do nothing or reveal much about the upcoming week...Definitely going to be important to watch the intraday action and see where the money is flowing into.
Mindset: 55/45 Bullish...as there are more charts at support than resistance, things looking kinda more bullish even though SPX is at resistance. but overall, very confused....
Ideal Bullish Sign: if XLF bounces up strong tomorrow on huge volume
Ideal Bearish Sign: if XLF breaks down strong out of the rectangle on bigger than average volume
Long Sectors:
PPH (pharmaceuticals are in a nice upward channel)
Tech (remarkable strength in some tech such as RIMM)
Short Sectors:
Casino / Gaming (intraday very weak)
XME (downtrend resistance)
Agriculture (downtrend resistance)
Coal Stocks ((downtrend resistance)
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