9/2 - Market Analysis

SPX...very neutral after today's huge pop and intraday fall. Glad to see volume back into the market but as we are in between support and resistance now, hard to say where it will go next...



QQQQ...big volume on a huge drop. Look for QQQQ to lead the market lower or higher...serious weakness without fundamental reasons baffle me.


XLF...financials ended with a gain. One of the strongest sectors yet again...but the market doesn't seem to care much about financials...its eyes are on the dollar and tech...but fyi...XLF looking bullish til atleast resistance...


UUP...dollar huge pop and drop then pop again later in the day to close near its highs. The super huge volume is very bullish but it does looks overextended in the shortrun. But nothing should deemphasize the importance of breaking through the huge resistance that has plagued the dollar for such a long time...bye bye commodities...


USO...a dollar play yet again but with extraordinary strength even at the end of the day as the dollar rallied yet again. Might today be capitulation or a breakdown on big volume? Easier to just go with the trend and say its a breakdown...but i wouldn't place much money here until we get a nice pullback


Analysis: Stronger than expected rally in the morning and even stronger than that was the pullback almost minutes after the morning rally. TECH was a downslope ever since 7 am e.s.t. and didn't look back at all. The weakness in tech and strength is financials doesn't seem to be based on financials or news and not really much technicals either...But it does make for a great pairs trade. I believe that the easiest trades in the market are those related to the dollar. The dollar broke huge resistance and now seems to have truly made a bottom. My list will basically mirror the dollar trade more than anything else as its the only chart above that seems to have direction.

Game Plan: Play with only a small portion of the portfolio until we get clearer signals on SPX and QQQQ. Trades should get much easier once we get a nice move out of either resistance or support so i suggest its best to dabble in maybe a dollar / commodity play but overall use capital conservation techniques to minimize risks...this way you will be well capitalized when the cherry picking begins.

Long List:

Homebuilders
Airlines
Financials (very short term)
Dollar

Short List:

Tech
Exchanges
Steel
Gold
FXI, EEM
Agriculture