“Worked all week now it’s time to play/Gonna get a little bit…Sideways”
-Dierks Bentley, “Sideways”
MARKET WRAP UP 06/16/10
For the first time in several weeks, we witnessed a relatively tame trading session, as the S&P 500 closed off 0.06% to finish at 1114. Despite closing flat on a few occasions during the past two months, we have seen wild intraday whipsaws. Compared to the market’s recent price action, today qualifies as an orderly consolidation session. In particular, after the huge move up from 1040 over the past ten days, the lack of a huge selloff today can be viewed as a bullish.
For many weeks now, I have talked about the idea of becoming more aggressive on the long side if and when we saw a few days of quiet consolidation. Not only is it important to digest our recent move higher in an orderly way, but this type of price action helps to firm up many short term extended daily charts. In fact, many of the high growth names that I highlighted last night have been up for five/six days in a row on solid volume, and need to take a pause.
As I note in the updated and annotated daily chart of the S&P 500, seen below, the bulls are by no means out of the woods yet. We are looking at a declining 50 day moving average, as well as a fresh batch of overhead supply from early to mid May. Thus, several more days of building a sound base is crucial to being able to tackle all of that tough resistance, in my view.
Because we could pull back to the 20 day moving average at 1084, and still be in a short term uptrend, I added some small hedges into the closing bell today. With a cash position of 67%, I am still taking a wait and see approach at this point. Being aggressive in all forms of gambling may be a fun time, but selective aggression is what gets the money over the long haul. Even in other professions, such as with fighter pilots and police officers, selective aggression is the hallmark of the most successful people. Letting the market reveal itself in the face of all of the recent events will continue to require a great deal of patience…and cash.
My top performing long today, $IAG (which I bought yesterday), is a pretty good example of a daily chart firming up and forming a sound base before breaking out (see below). Props to Jake Gint.
On the other hand, another one of my top longs, $LULU, needs to take a breather. I will likely add to my 1/2 position on a light volume pull back.
My two new longs today both offer appealing charts, to the point where took 1/2 positions in each, seen below.
I agree with your analysis, but country music (if that is what it is),
is not my thang.
lol no worries–I keep it eclectic here. thnx for reading
Nice post.
thanks shaz
I like the look of MDAS ,
check out APWR.
good look, thanks
me likes APWR
Good stuff again, cNw! Thanks!
sold KOG now @3.74 for +.19
bot BP oct puts [email protected]
still holding DGP
very well played, JIm! Good job.