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MARKET WRAP UP 07/26/10
In just a few short weeks of summer trading, the bulls have rejected the breakdown below the key 1040 level on the S&P 500, and have now pushed us up towards the top of our multi month trading range. Not only have the bulls recaptured the 20 and 50 day simple moving averages, but we also closed slightly above the 200 day moving average today as well. Breadth was strong, while volume was weaker than Friday’s positive close. With the S&P closing today’s session up 1.12% to 1115, the key issue going forward is whether the bears will soon arrive to prevent a true breakout, and push us back down into the broad trading range.
As the updated and annotated daily chart of the S&P 500 illustrates below, we are pushing the upper limits of the price action that we have seen since May 20th of this year.
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Turning to other key indices and sectors, it remains bullish to see technology, small caps, the transportation stocks, as well as the emerging markets leading the charge higher. All four of those areas showed relative strength throughout the correction, and are now outperforming to the upside, as their updated daily charts illustrate below.
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Going forward, my strategy is to lock in more profits (as I detailed today in earlier posts), should we continue a melt up of sorts. Despite the vast change in sentiment amongst traders in the past few weeks, from wildly bearish to bullish, my inclination is to keep buying the dips and selling/shorting the rips, holding an overweight cash position to boot. Should the market continue with a definite breakout in the coming weeks, I have no bias preventing me from quickly reverting back to my bread and butter strategy of aggressively swing trading in a trending market.
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TOTAL PORTFOLIO:
EQUITIES: 26%
- LONG: 26% ($ARUN $BX $SAPE $POWR $JMBA)
CASH: 74%
Turnaround Tuesday?
Just kidding…sort of
I’m short a few currency pairs…less than usual lot size though
If it goes my way I’ll add to it
I’m showing over bought…correlations ……some believe some don’t
(don’t know if U can see my e-mail name or not….if not, Know that I DM every so often twitter…and I did campaigning for you awhile back)
Been a fantastic run these last 2 weeks regardless of what market does from here.
Love that Mario pic at the top!
Sold the rest of my UWM after consumer confidence released (now 100% cash).
Bought some TWM (now 75% cash).
Bought more TWM (now 50% cash).