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For the second straight session the stock market was down sharply before it slashed losses. This time, though, stocks failed to finish near their highs for the day. After the close OVTI, CPRT, UTI and NCTY were the most notable names that reported.
These gaps lower at the open are getting old. It feels like I start everyday with a piano on my back while I run with a ball and chain on my ankle in sand. Just brutal. I will be completely frank, I have not seen such weird, choppy, indecisive action in I don’t know how long. I love volatility, but this market is afraid of it’s own shadow lately as evidenced by the sudden jerks, failed rallies, failed breakouts and sudden fits and starts etc…
Korea behaved today but the dollar ran higher again on lingering European fears. Credit spreads in Spain and Italy were running this morning as the bond vigilantes there are shorting. S&P is considering a downgrade of Portugal, but we all know by now that they are always late to the party and Portugal will be in the Mediterranean by the time they add any value. (See housing, subprime and banks as it relates to S&P).
It was the second day in a row that the S&P dipped below its 50 day moving average, but both days managed to close above it. I still say that a break of 1170-1173 level gives way to a quick move to the 1130 level, at which point I will buy heavily. We still have room to run higher and a face melter of a rally could be just a day or two away, depending on the dollar.
The market hates uncertainty and right now that is all we have. As things come to closure (Europe, Wikileaks, Korea, the Dollar) we should rally hard and fast. The question is when does the market discount it and start buying?
Housekeeping
The month ended today and at first glance I think the P&L did pretty well considering the market saw many challenges. I realize that some of you feel that there are too many names at times, so I am trying to mange that better for you all. I try to give you a choice , as sometimes many stocks have terrific set ups at the same time. As you know, my blog, as my life, is a work in progress, so suggestions are always welcome and appreciated. I am also shooting for a webinar tomorrow or Thursday evening, so keep an eye out for the e-mail.
Have a great night.