Today IÂ see the number of breakouts from quality bases increased for the first time in a week or so. Obviously, this is bullish. The bulls want to see breakouts from quality bases continue to increase while watching the number of breakdowns decrease. The number of stocks above their 200 day averages also appears to have some room to move upward from its January lows.
 On the indexes, the Nasdaq closed today right at short term resistance. It is the third day of gains for the tech index. The Dow and the S&P continue to consolidate, both printing narrow range bars over the last three trading days. My guess is the Nasdaq will not close up 4 days in a row.
So what to do? I’ve got to tell you, I do not know. I’m confused. I’ve watched while several quality stocks have broken out without me being in the trade. [[URBN]] comes to mind. I’ll wait for a pullback on that one and then reconsider. Agriculture stocks and commodities are also still making gains, but for how long, before the recession bug bites? On the other hand, some shorts are also working, but many previous breakdowns are starting to firm up. Very confusing.
It all comes back to convictions. I think there is more weakness ahead. Therefore, I will continue to salivate but not participate while watching the new breakouts, and will keep them on my radar in case something happens to make me turn bullish. I will continue to hunt for short setups, which I will enter at proper points. If we get another couple of days of strength, there will be more short setups. I do reserve the right to change my bias, should the breakouts continue to improve and the breakdowns continue to start basing rather than moving down farther.
As it stands, I do not really have any good short setups, save [[DOW]]. Therefore, I will post a few really nice breakouts. After all, talk is cheap, and charts rule.
Show me a high-volume rally and i’ll believe.
Another great post Shed. I’m standing aside on short term trading until I feel conviction either way, until then I may occasionally trade some range bound stocks but that is it.
RTN was a very frustrating stock for me. I owned it for a long time and finally sold it into one of the recent rallies. Cramer was pumping it the other day, I can’t shake the feeling that’s the kiss of death and RTN will continue to stagnate. I’d have to see some major change before getting back into it. Just my girly-girl opinion of course.
Things are indeed confusing. I still see more potential shorts out there than really good longs. The agriculture and commodity stocks that are moving are all in terrible looking bases and most are lacking volume on their moves, particularly the oil stocks (ARD, DNR, PXD, SU). Most of the charts I see tell me to remain more bearish than bullish, but I am trying to keep my mind open. I hope today can give us a better clue, because if we don’t get a big-volume up day soon, this market may continue lower.
Sold my HNSN and my lucky ZOLT puts today. Bought more FXP.
I covered all my shorts this morning.
I will take a look at the index technicals tonight, along with breadth.
Momentum trading works less well in a trendless/down market.
MANT is the company that is like getty images but gay, right? Didn’t DT get the picture of “ragin” from their subscriber service. [obvious fake, nice try DT you gypsy]
otherwise, no, I forget