Monday, May 4, 2009

05/04/09 Market Recap

Mark another one down for the bulls, right from the open and especially into the close the bulls showed a lot of strength. We closed at 907 in the SPX finally overcoming that key 880 level(23% retracement) that we have tried for the three previous days to close above. Pretty much everything was up today and all sectors showed strength, with financials leading the way up 9.58% while consumer stables lagged behind rising 1.67%. We saw strong upward TICK readings on good volume. There was also continued strength in participation and buying sentiment which is not something normally found at market tops.

Looking at the chart of the ES we are the at the top of the channel and I could see the market going down tomorrow. The main theme remains up and i'm only doing speculative short positions, my portfolio is currently 80% bullish and 20% bearish. If we do see a drop I will either get rid of/take some off of my short positions. These are very low risk shorts that are right at a critical level of resistance, so my stops are very tight.

Here is an example of brutal shake out that happened to me on BPSG, this is one of the reasons I don't like trading low volume stocks.

Current high risk long position, AHD:

Current short positon, UNP:

Source for UNP from Slope Of Hope

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