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MARKET WRAP UP 09/20/10
In his book, “The Winner Within,” legendary basketball coach Pat Riley describes a significant breakthrough as a positive thunderbolt. Riley includes some indications that a major breakthrough is about to happen include: feelings of frustration because of hard work not being rewarded with success, deep loneliness, a recognition that a core healing must take place, healthy introspection, and prior instances of “choking” when faced with similar challenges. When viewing Riley’s book through the lens of the stock market, today had all of the classic signs of a breakthrough.
First and foremost, the S&P 500 blasted through the key multi-month resistance level at 1131, to close up 1.52% to 1142. Breadth was impressive, as many stocks broke higher after the end of last week’s benign consolidation. The small cap index was by far the best performer today, as traders have embraced risk appetite in a convincing manner. As I discussed over the weekend, once we saw a move above 1131, many bears covered their shorts in the face of a break above an obvious resistance level that had held throughout the past several months.
Despite several measures indicating that we are becoming overbought, I believe we can continue to move higher in the coming days. Moves of the magnitude we have seen over the past several weeks often catch market players by surprise. After a grinding trading range since May, the market digested many of the bad headlines this summer without entering official bear market territory, as we never fell 20% from of the April highs. Not only have we seen leading stocks, such as $AAPL and $FCX, go parabolic over the past few weeks, but many other stocks are setting up behind them as well, building bases and breaking higher.
Indeed, the stage is set to test prior key levels, starting with 1150.
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CnWIG!
So, would you say we’re now in an uptrending market, or do we still need to see a higher low from here?
Well, we did break the range. However, I would like to see a benign pullback after hitting 1150 or so. Then again, I have to adjust to what the market gives me.
…lookin’ forward to your posts tomorrow when were DOWN 140 DOW points on the FOMC …
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errr…
…lookin’ forward to your posts tomorrow when uhh … ~ we’re ~ … DOWN 140 DOW points on the FOMC …
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Alf,
Just calling it like I see it, my friend. Sure, we could give back all of today’s gains tomorrow. However, are you really going to deny the progress made by the bulls today?
… in a word … NO !!!
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It was both impressive … and painful !!! fwiw
I was just trying to reel in the preponderance of bullish giddyness ! (not necessarily by you)
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This “ballbuster market” could turn on a dime !!! (you know that)
Just keepin’ it real !
To your credit… you have done a credible job doing so as well !
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Just felt an additional pitcher of cold water to the face of the simpletons was warranted !
With all due respect !
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Well, it is a little problematic that the trannies lagged today. Also, the financials still look like dead money when they should be busting out here.
TZA might actually be a good play as we head into the meeting,
it may give the bears an opportunity to cut their losses.
If I recall correctly, the trannies were among the leading indexes
back when we rallied in the spring.
Interesting that it and the financials have lagged.
Well I am glad everything is good again and stocks are moving up.
Trannies and fins are saying something. Maybe not saying end of the world, hindenburg fuckery type shit, but perhaps indicating that the market ain’t totally ready yet… we’ll see soon enough.
Watch… now that the bears have been tortured and nobody believes that we will get a pullback, we’ll get a sucker punch pullback to rape the bulls… and then rip to SPY 1160.
ES unch’d right now. Back to bed…
Hey Chess; put an eye on GNW… Its going to heaven!!!
can you coment?
Sold my YHOO and bought some OC.
Do you understand that it’s high time to receive the loan, which would make your dreams come true.