MARKET WRAP UP 05/27/10
With the prospect of summer trading and a long holiday weekend ahead of us, the bulls delivered a wire to wire victory today as the S&P 500 rose 3.29% to finish at 1103. While breadth was very impressive, volume decidedly was not. Moreover, we closed just under the 200 day moving average, as well as other key points of resistance. With that said, a win is a win, and the bulls did a great job of breaking above the tough 1090-1095 range. The updated and annotated daily chart of the S&P 500, seen below, should illustrate all of these points.
I expect tomorrow to be an even lower volume affair, as many traders have already started their long weekend. After the way the bears have owned this market over the past month, I expect them to stand aside and give the bulls some room to run here. As opposed to the raging bulls, today was most certainly not as fun for someone like me sitting in 100% cash. However, I accept days like these as being a part of the game. Unhealthy, bearish markets are actually defined by occasional days consisting of exuberant, low volume spikes. Until I see better looking charts, I remain content to sit and watch.
The most bullish scenario that I continue to see would be several days of tight trading, allowing charts to firm up and form healthy bases. If we see a continued “V” shaped bounce–especially on low volume–I would view it as an excellent short selling opportunity, as we would be forming a bearish wedge just like we did several weeks ago.
Finally, remember to relax and enjoy the holiday weekend. We are in a very tricky market right now. We could be in a bear market, within a bull market, within a longer term bear market. I am sure these past several weeks have been intense for many of you. Keeping a clear head is crucial to your success as a trader. So, if you do not feel inclined to trade tomorrow, then don’t do it.
Just make sure you check in to iBC and download the new and improved iBankCoin APP for your Apple products!
[youtube:http://www.youtube.com/watch?v=G4qblq0uahw 450 300]
Your lack of exuberance is refreshing. Sobriety is key in such a heady market. I salute your stoicism.
Thanks zenrat. I prefer to trade stocks in a well defined uptrend. To bottom pick stocks in this environment is not my style. So, I will miss out on days like today.
That’s perfectly fine. Whatever suits your style. You can’t (and won’t) win them all anyway.
I commend you for sharing that little bit of insight into your trading philosophy. You found the keys to the kingdom,my friend.
The willingness to miss out on “the action” takes discipline and a certain amount of confidence in knowing that you’ve always got game and you can always figure out a way to make money trading. You don’t have to take every trade that might “look good”. That’s liberating. You are no longer captive to greed. Bravo!
Often, it’s what we DON’T buy (or sell) that makes all the difference.
Good trading.
Thanks alphadawgg. To me, it is the same as selecting only the best starting hands in Texas Hold ’em. I make my money with big pocket pairs. For me to start playing any two cards and trying to win that way is too much work and too much risk.
Great week of blogs chess. Hammer time.
Bull or Bear? That is a good question as their seems to be a divergence of opinions both here on the internets as well among the talking heads in the picture box.
Someone (uh hem) should post a poll … would make for an interesting if not controversial outcome, eh?
The Silence of the Bears
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Gotta say … pretty clever !
Wish I’da thought of it !!! fwiw
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… he said as he curled up in his cave and licked his wounds …
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Trading like a Bear is not the same as trading like a Bull. Trading like a Bull is easy, stocks go up 70% of the time and down 30% of the time. Wannabe Bears gotta realize this and let the market breath back in after it has exhaled exuberantly. The market will “work against” your trade almost 70% of the time, so if you go short you gotta know what the fuck you’re doing or it will go up in your face until you’re broke. In “short” leave the Bear work to the pro’s lest you be stamped on by the almighty, money printing, Obama loving, Geithner sucking Bull
Amen.
Point taken … that said … Traders Trade !
It’s not about being a BULL or BEAR … it’s about being “bullish” or “bearish” !!!
And NOW … the bias IS …or, at least SHOULD be one of “bearishnessness” ! (as it were)
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Traders also fail…a lot. 90% of people who day trade go broke in their first year and 50% of the remaining 10% go bust within 3 years…go trade em cowboy!!! Go “all-in” short when we hit 1120…I dare you
… uhhh … as I said, “cowboy” … Traders Trade !!!
I been at this game for a while …save your lectures for someone who cares !
With all due respect, of course !
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You stepped in on my lecture(which usually costs money) remember? with all due respect
Excellent analysis as usual. Since I started reading your blog (upon being promoted from the PG) I have noticed that our philosophical/analytical views regarding the market are strikingly similar. Anyway, I always enjoy the write-ups, so thanks for taking time and sharing your views.
Nice post chess. enjoy the holiday..
you too ptr thanks
Excellent, your tab is now viewable from the iPhone.
awesome!
Just keep your fingers outside the cage mam. Do not feed tbe bears!!!
Getagrpup room and beat the snot outta each other, cowboys.