9/11 - Market Analysis

In The News: Trade deficit rises to a new high and still worries on LEH and WM drop the markets to a very low open...Unemployment numbers were slightly higher than expected but overall still bad....and whats this talk about FED maybe lowering rates next week?

My Performance: Overall a pause day in my account...nothing to buy...sold my biggest position and now mainly in cash...not much to say other than i am happy that my analysis was right and that i followed it today...

SPX...very beautiful bullish candle. sets up for a very nice 2x bottom if we continue to rise from here. volume is encouraging and so was the quick reversal off the horrible open...


NDX...this index is most bullish to me...look at the huge engulfing reversal candle...a continuation candle tomorrow would be needed for confirmation though. Big Cap tech was definitely the leader today...RIMM, AAPL, and GOOG either held of bounced off supports today...


XLF...participated in the rally despite having LEH news linger...MA's continue to hold as support...


RKH...this graph is looking much better now as the support line yet again holds and the MA's are turning up....watch this carefully as if it breaksdown or breaksout, the market will follow...BAC is looking good...


UUP...dollar continues to rally..it broke the 2x top formation i was looking at yesterday and for that reason, i really don't have much confidence in holding commodity longs..but volume is bearish...so we'll see...small positions and tight stops...


WTIC...oil on this chart held...USO and others fell more though...either way, today was mainly a sideways day with no important prices breached in either direction...No bottom yet in sight...


XME...another good move for SOME commodity stocks...as yesterday we had everything rally, things looked good..today, it was a stockpicker's rally...that is not good as this small bounce has jsut started...makes this rally very weak...be very careful here unless dollar drops huge overnite...


DBC...this broke the support that i've been eyeing..makes sense as the dollar again rises...GLD also keep falling...FXE can't hold onto anything...again, commodities are showing all signs of a deadcat bounce ending as early as today's close...


Analysis: All charts are pointing to is that we have to trade very carefully right now. Things are in the grey now and the easy bounces seem to be done. Best looking area to have continued strength is QQQQ as tech did have a good handle on things today (but even strong movers, like RIMM and GOOG, engulfed on mediocre volume). Banks are ok but as news surrounds LEH and financials report earnigns next week, i would take extreme caution in holding any financial positions overnight. Today's bounce in commodities coupled with another rise in the dollar, drop in gold, and fall in the commodity index is really looking deadcat-ish...I mean how can i technically justify the move up in nat gas stocks if nat gas falls or the rise in energy plays when oil falls...it just makes no sense to me so i rather wait til it makes more sense...the only commodity that jumped today was UGA (gas) and it didn't even close with a strong candle...overall, the best trades are not now. Cherrypicking will continue soon but for now, everythings a mess and anything that has worked in the past couple days doesn't seem to have legs. Lets see a pullback or contination before adding any new positions....

Ideal Portfolio:

Before Close
- take 90-100% profit on commodity longs
- close out any huge positions

For Tomorrow (net long)
- small position long tech
- very very small position long energy or commodities (preferably refiners)
- 90% or greater in cash