State of the Market – 4/6/09
A down day today on Wall Street, but with lower volume and a lack of heavy selling, it probably means nothing. The market opened with a gap down and although choppy, it continued moving lower and lower throughout the morning until a little after lunch. From there, it chopped its way higher much like the morning, just in reverse. A late spike allowed the indices to close well off their lows for the day, which made today another overall good showing by the bulls. Volume as I said appears lower.
I made two trades today off of what I saw as bear flags this morning but neither worked out. I entered FAZ at $16.90 and short MET at $24.75, but was stopped out later (FAZ at $16.58 for a 2.1% loss and MET at $25.11 for a 1.6% loss). Although the market declined throughout the morning, these stocks actually rose so I am not upset about getting stopped out. It happens (to me this year, it happens a lot.) I am not quite sure why the financials bounced off their gap down while the market continued to sell off off of its gap down, but that’s what happened.
I continue to let my conscience affect my trading here and although I hope at some point soon I will be right, it is tough right now. I can’t seem to get anything going and my timing has been off trying to short this market. However, I really do believe that the smoke and mirrors being used by those in power to push this market higher will eventually backfire and that the truth will come out. When that happens and traders realize that the news isn’t better and is in some cases worse, I do want to be short because I think we could be looking at the final leg down of this epic bear market. That’s why I stubbornly keep trying. Perhaps I am thinking too far out but that’s the thought that I keep coming back too – one final swoop down where everyone really does give up hope and then we can gradually move higher longer-term. I still just can’t buy in my heart of hearts that we’ve see THE bottom. Maybe I’m just being stubborn. Either way, my timing continues to be off.
Today took a little of the overbought conditions away via the McClellan oscillator but we are still much more overbought than anything else. We need to pullback and as long as we do it like today, then it has to be considered completely healthy and I may have to change my bearish outlook, as difficult as that would be for me. If you’re looking for individual plays, most of the setups I showed on either side of the market in the video last night are still valid. Except for CSKI, none of the shorts look like they broke down yet, but neither did they breakout. On the long side, I still need to see some rest from the solars but if they do I would be willing to jump on them. OCN, RGR, and WSBC are the only other ones that look interesting to me here. If I find anything else tonight, I’ll try to post some more ideas. Take care, and good luck tomorrow.
Excerpt from:
State of the Market – 4/6/09
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