Saturday, May 16, 2009

05/11-05/15 Weekend Wrap

We got our first down week in the market since the start of the rally back in march, the SPY lost -4.6% and the bears experienced something they had not seen since February. The biggest losers this week were financials and real estate (each down approx. -11% for the week). The SPX made lower lows and lower highs last week which gave reason to move to the short side, and although it was down over 10 handles on friday it closed above that all important level of 880 which is the 23.6% fibonacci which acted as resistance a few weeks ago. Also for the first time since early March, new 20-day lows out numbered new highs, the percentage of S&P 500 issues trading above their 20 dma got cut in half from what it was last week. This week will be key as we will find out if this move down is for real or just another little speed bump, right now until proven wrong(a break of the current down channels seen below) I am bearish.

The ES is continuing its bearish outlook as it is making lower lows and lower highs, it also broke down out of an upchannel that it has been in since late march . I will remain a bear as long as we stay(and close) in these current down channels we are in, a close above 905 in the ES will get me out of my short positions.
We need to pay close attention to the Nasdaq as it is looking slightly bullish as it made a small pattern of higher highs and higher lows but we are still stuck in a down channel.

I was up overall on friday as I have been leaning much more towards the bearish side, my best short continues to be DECK which took some profit on friday but I still like my position in it. When taking up new positions I have almost always found it to my benefit to wait until the close before entering that position, I violated this on friday and it ended up costing me. I also find it's important to stick to your overall view of the market and not let the wild intra-day swings shake you out. My weakness in this area was evident on friday during the run up in the morning I sold some of my shorts even though there was no technical reason to do so.

Current low risk long, CSIQ:

Current short, NOC:

Long oil: USO at potential level of support:

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