We are at a very interesting juncture in the market. The S&P missed hitting the January snapback high by 10 cents. The NDX( nasdaq 100) blew through resistance at 1185 and closed at 1900. It was a beautiful day for the bulls, and the bears over all had a tough week. I have commented that the last few rallies have lacked volume and I wanted to show a comment that Alan Farley made today:
We’re on track to post the 21st trading day in a row of below average volume on the SPY and QQQQ. That isn’t good news, considering the huge rally this week. I believe it points to the hesitation of the public to return to equity buying (or believe Wall St for that matter).
There’s an old market wisdom that says, when you can’t find the volume at current price levels, it will show up much higher or much lower. I guess we need to wait and see which direction finally brings in the big numbers.
He also opines that there are some pretty big opening gaps left behind by the SPX and NAZZ this week. I have rarely seen a gap that wasn’t eventually filled, especially on the major indices, so it’s something to be mindful of going forward.
My own trading day was kind of weird as I had a few stocks that I was looking at for entry. MOO,DZZ ,DUG and USO. I never shorted the MOO as the ags rallied and joined the party as I thought they might. DUG was not going the way I expected even with oil down earlier in the morning so I avoided it and DZZ was a good call but gapped up with gold down so I didn’t want to chase it. I ended up going long not short USO at $92 and kicked it at $93.50 as I posted on twitter on the upper right of the blog. If you guys have any interest in day trades I am doing, or trades that I think are attractive, then that is where you want to look.
Keep in mind that overbought conditions can stay overbought so this could play out a bit longer, but I would be lying if I told you that my short list wasn’t much, much bigger than my long list here. Hope you had a great week and I will check in over the weekend.
If anybody has a great trading story shoot me an e-mail and i will post it. It can be profitable or a huge loss or just something funny on the trading side. The reason I mention this is because a great trader buddy of mine was having a big day yesterday. He bought GOOG in the after market, did real well, went to sell it, but double sold it,didnt realize it(now he’s short) stock goes up another 20 bucks and not only wiped out his profit for the day but ended with a huge loss. It’s happens to all of us. It was a really big loss and I did my best to talk him off the ledge after several martinis.