13 Observations on this market
- Posted by downtowntrader
- on May 15th, 2012
I’ve been relatively quiet lately and a lot of that is due to the way the market has been trading. While I would love to say I took advantage of the recent weakness, the truth is I’ve been mostly taking it light with my trading. The market is in a difficult place for swing traders right now as we are oversold enough that shorting is likely too dangerous, yet it is too early to really get long in a meaningful way. Tops and bottoms are hard to trade and there is a decent chance we have more weakness ahead as we move into the summer. I jotted down some observations to see if a pattern emerges, and while I believe we have a good shot of bouncing within the week, there are enough warning signs to keep me mostly disengaged in my swing account from the markets for now.
- $SPY $IWM $DIA $QQQ are below their 50 ma
- All other than $DIA failed to make new highs on the last thrust in April and then proceeded to make lower lows.
- That lower high could be turning point in a larger topping process
- We are heading into a seasonally weak period (summer trading season)
- Volume has been higher on down days
- There have been lots of topping tails recently showing lack of confidence at the close
- As shocking as it sounds, traders have been selling Ipads ($AAPL) and burritos ($CMG) showing faltering leadership
- Weekly charts don’t really look bad
- Market is oversold on some indicators (McClellan) and getting close on others (T2108)
- Most of the indexes are near support levels
- There are still some stocks acting well $LNKD $HSY $SPG
- $IWM is holding up relative to its big brothers showing that there is still some appetite for risk out there.
- $FB is coming
I see more negative in the intermediate term which has me on guard. Are we headed lower? I won’t insult you and tell you I know the answer without a doubt. But, trading is not about knowing with 100% certainty what the next move is. Its about preparing for and then recognizing what is unfolding. I’ll be watching each of these observations to see if a new pattern emerges or if we settle into a true down trend.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Joey Fundora is a private trader who has been trading for over 8 years. Joey specializes in discretionary swing trading of stocks almost exclusively through the use of technical analysis. (More)