Sunday, April 19, 2009

Weekend Wrap Up (04/13-04/17)

Not the best of weeks for me as I had a drop in my overall portfolio. We saw the s&p move right up to the price of 875 which I predicted last week when it was trading around 830, did I capitalize on the move up? No. No i didn't. My portfolio was weighted to the long side but my longs didn't perform the way I had hoped. On friday we touched 875 and instantly started to come down closing at 869. I'm predicting a move down from the 785-785 level down to 770 which would be a 50% retracement and then we start another uptrend from there. If that down trend breaks at the 61.8% level (745) then we could see new lows. If the fib resistance doesn't hold and we close above 880 on high volume then this prediction goes out the window.

Again I will be very busy this week and will not be actively trading, I'll just let my positions (which are already small) run and see what happens. I am currently leaning more towards the short side but only slightly. The market still seems bullish so there is no reason to load up the truck on the short side until we see some real signs of a market decline such as lower lows and lower highs, a negative breadth, and a break of the 5 day moving average.

I am looking at this developing wedge in the ES (which is a bearish pattern), a break of the wedge to the downside will be very good for the bears.

We are seeing a lot of garbage stocks that didn't really participate in the rally starting to make huge moves to the upside, this may be a sign that the market is coming to a turning point. Dr. Brett describes our current situation very well:
"Some of the sectors gained Technical Strength on the week, others lost a bit. This kind of mixed performance while the overall S&P 500 Index is making new highs suggests that the rising tide is not lifting all ships equally. I am watching this carefully, as such slowing down of strength is what we'd expect to see prior to a market consolidation" Link

I leave you with another visual summary of the current economic condition.

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