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Well, the S&P is moving a bit higher in the wedge that is posted above. If you see the small horizontal red line within the wedge, that’s some short term resistance that the S&P hit today. You can click the chart to enlarge. I have talked about his wedge a lot lately, but it is a good way for you to track what is happening within the S&P’s trading range. Since the lows that were put in Monday, the index has rallied about 50 points. The big question is where do we go from here and can this rally continue.
Europe is still a mess, BUT some of the fear has left the building it seems as Greece (for now) seems like they will get help from Euro nations and not default, emphasis on “for now”. If Europe can hold itself together, it is possible this rally could extend.
A big part of the success of any rally will be how aggressively fund managers pile into stocks through thew end of September. It is not only month end, but the quarters end and if we tick higher, “performance anxiety” will surely kick in and maybe add fuel to the fire. It is because of this theory, (and some decent tape action,) that I added a few longs today. Those names were AAPL, WLT and TNA. We also had a couple of decent long day trades in CF and CMG.
I took an early stop on HAL, which was one of our shorts. It rallied strongly off the lows that was put in at the open and if the market does continue higher, this is oversold and could snap higher and I don’t want to get caught in a squeeze.
As always, please review the P&L nightly. Have a great night and good luck tomorrow.