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MARKET WRAP UP 06/23/10
After a morning gap down to 1085, the S&P 500 chopped and flopped slightly higher the rest of the day to close down 0.30% to 1092. On days when the Federal Reserve makes an announcement, the market usually sees violent price swings after it is released. While we certainly saw some volatility today, the overall action was quite tame compared to what we have seen the past few days. In addition, the broad market volume today was again meek relative to the past few weeks, showing a lack of conviction by market participants.
Thus, the market is still stuck in a trading range, and is attempting to chop up as many traders as it can. As the updated and annotated daily chart of the S&P 500 illustrates, the market found support in its morning gap down at the 20 day moving average, as well as the resistance trend line dating back to April (see below).
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As you can see, the competing forces of the downsloping 50 day moving average, yet rising 20 day moving average, are clearly at play here. Eventually, we are working towards a resolution of these conflicting reference points. However, being patient and holding hedges–as well as high levels of cash– are my best ideas until the moment of truth arrives.
While it is encouraging to see that the prior resistance trend line on the S&P turned into support today, it simply is way too early to bet that we go straight up from there. However, it is worth noting that the historically leading transportation stocks also have found temporary support at the prior resistance line (see below).
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Finally, I made no changes to my portfolio today. I was pleased to see every position in the green, save $GMXR. Ironically, I think $GMXR has by far the most upside out of any stock in my portfolio. I will be patient with this one, so long as the volume pattern and bottoming out process remain in tact.
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TOTAL PORTFOLIO:
EQUITIES (Including ETF instruments):42%
- LONG: 34% ($APKT $LULU $CRM $GMXR $ISH $DECK $THOR)
- SHORT/HEDGED: 8% ($TLT $TZA)
CASH: 58%
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Nice. Oddly enough, the candle looks quite bullish on the SPX.
Another great post. Thanks for the breath of sanity.
Sammich time….thanks man
top of the morning to you, my friend. yes, i can definitely feel the smell of summer in the air. choppy market action, and 100 degree temps here in the queen city!
thanks for another interesting post.
ps,
long CF into the close as it flirts with 66
Try Blue Cheers version..circa 68…Haights loudest band
Stopped out of all my momentum longs this morning