9/8 - Market Analysis

In the News: FRE and FNM bailout by Dumbass Hank Paulson causes a huge gap up in financials and the entire market. FRE and FNM fall like rocks though. The dollar continues to rise despite the fact that the gov't is now in much more debt now than compared to the close of last week. Financials lead the way as QQQQ lost all of its gains and fell big into the red. Everything fell right after the gap up with commodities falling first. But by lunch time, a strong rally from the bulls would push the market to a big bullish close.

SPY....today everything moved way faster than i expected. I should have paid more attention to the futures. All i knew was that it would be up. Had no idea it would gap so much as to even break strong resistance...this chart looking more bullish than bearish as we have turned prior resistance into possible support.


QQQQ...weak as hell...again tech lead the weakness. Bears are hiding in tech while bulls are in financials. To see examples of weakness, look at the intraday charts of GOOG, RIMM, AAPL...something definitely looks wrong...i blame it on tech's vulnerability to a possibility of a huge global slowdown...definitely techs will keep falling if the dollar continues its strength. watch it...


XLF...financials...strong...broke resistance on huge volume...tomorrow we will know if its just a headfake or not..


UUP...dollar gapped up...then continued strength into midday...then it fell quite strongly midday to close still up but well off its highs...i want to see it fall but too bullish to really feel 100% confident betting against this rally...


Euro...showing signs of life again...but setting up like a bear flag...warning signs all over this trade but gives some credibility for arguements of a dollar pullback nearterm...


Analysis: Gap. Fall, Rally...crazy! honestly, from the charts of the indexes and financials, i am confused. I feel much more confused today than yesterday to say the least. Just looking at the past 2 daily candles though, i do feel more confident betting that tomorrow will continue its rally than fall. And remain much more bearish on tech than financials. Knowing that the market is very volatile and coming off huge intraday moves, i am kind of staying away from playing the overall market. Instead though, i feel the dollar is a much easier graph to read. With tight stops, i still beleive that a commodity bounce ranging from gold to oil to agriculture and metals will still happen. The risk / reward is much better than anything i see in the broad market and as nearterm supports remain, i see not much reason to be more bearish on commodities than on friday.

My Gut Says: Oil will rise, dollar will drop, commodities will rally tomorrow. Markets will rise atleast in the morning. As for will it end higher, i am unsure. A relief rally in tech would also not surprise me. News should be slow tomorrow, so hopefully tomorrow's charts will give us a better idea of the state of the market.

Long Ideas:

refiners (tso, vlo)
homebuilders (ctx)
oversold oil (rrc)
nat gas (apa)
mining and materials (nue, aa)
agriculture (ipi, agu)

Short Ideas:

tech (rimm, aapl, intc, jnpr)
pharmaceuticals (ilmn, mygn)
casinos (wynn, penn, lvs)
china (sina, sohu)