_________
MARKET WRAP UP 12/16/10
Just when it looked like the bears had finally cracked the code to this market, the bulls showed some real heart to finish the S&P 500 up 0.62% to 1242. Breadth was soundly positive, as the internal weakness that we had seen the past few days was not nearly as pervasive, save a few disasters such as $MA, $V, and $VECO.
If anything, today illustrates the danger in trying to initiate swing trades that are counter to the prevailing trend. Many market players took yesterday’s weakness as a sign to put on some short positions and cut all longs. Unfortunately, Mr. Market does not usually make those opportunities so easy to identify, especially as we approach the end of year festivities.
Going forward, I continue to believe that holding shorts for anything more than a quick scalp is a mistake. With the leading indices and sectors sporting bullish consolidation patterns (see charts below), the correct posture is either long or in cash. Moreover, just as everyone seems to be writing off the rest of 2010 as a dead period, we could finally see those marquee market leaders break out, namely $AAPL.
__________
__________
__________
__________
__________
__________
Go TIE go!