____________
MARKET WRAP UP 12/08/10
We continue to consolidate right in the vicinity of our yearly highs, in the 1220-1230 zone on the S&P 500. John Wooden once said, “Don’t mistake activity for accomplishment,” and I think that phrase is particularly poignant right now. Swing traders would be wise to focus on polishing their watchlists and exercising patience, rather than simply executing trades for the sake of doing something during the session.
While I remain bullish through New Year’s Eve, I would not be surprised to see a quick shakeout down to the 1210 area, which would likely be a terrific buying opportunity for traders with sufficient capital on hand to take advantage. If the dip does not happen, we could be in for a few more sessions like today, with relatively bullish undertones to an otherwise boring day.
Finally, today was also an excellent reminder to never aggressively act on an individual candlestick which appears to indicate an inflection point. Yesterday, I warned that the calls for the bearish shooting star candles printed across the leading indices and sectors were far too inconclusive to act on in any way. The key to reversal candlesticks is confirmation, and so far we have not seen much of that at all. Even if you do act on them, you had better keep your stops tight.
(No charts tonight)
Bought some REXX (looks like a good pick by The Fly).