Friday, December 21, 2012

Markets implode

Futures are down big due to overnight developments.  

"House Speaker John Boehner's big idea for a backup "Plan B" exploded Thursday night when, after days of wrangling with his own troops, he realized he didn't have enough votes to pass the tax cut part of his plan"

Markets have been rallying on low breadth for quite sometime.  If you read my previous posts, I have been advocating less exposure to the Markets.  This implosion overnight in the futures was an event  waiting to happen.  This is a news driven market.  If you are long, sell on any bounce, go back and enjoy your holidays and assess the situation in 2013.

Tuesday, December 18, 2012

Strong Day

Strong gains on heavier volume than the previous session for all three indexes viz SPY, IWM and QQQ which is encouraging. However, all indexes are closing in on resistance levels.  Breadth continues to lack in this uptrend.  But lack of breadth in terms of number of stocks participating in the move either way has been relatively low this year.  This lack of breadth does not give me enough conviction to get fully invested.  Still this is a headline news driven market.  If a trade is working in your favor, keep the profit target small and cut your losers even faster in this market.

Sunday, December 16, 2012

Market continues to hold on to gains

Markets continue to hold on to the gains.  If you look at SPY, it broke above the trading range last week and quickly fell back to the base.  Breadth remains extremely low and yet this rally remains intact.  The Fed is trying everything it can to prop up the market with the announcement of another round of bond buying last week.  The reaction from the market was 'sell the news'.  But it appears that the bulls are in control so far.  This environment is very hard for small traders as this choppy action creates a lot of whipsaw which is dangerous for ones portfolio.

Monday, December 10, 2012

Markets flat and choppy

Markets are holding their ground last couple of weeks after a rally on weak breadth.  The daily trading action has been choppy and the markets finish flat at the end of the day in the last couple of weeks.  There is clearly a divergence in volume on this rally.  A decisive break above or below the trading range on relatively high breadth would signal the short term direction.  Until then it is better to remain in cash.

Wednesday, November 28, 2012

Markets holding ground

The day's action started with a gap down and for a moment looked like the markets were headed down.  Buy programs kicked in at the hour from the opening and the markets built on the momentum.  It is important to watch the price action and not assume or predict the direction of the markets.  Betting against the market is a loser's game.  It is not about whether you are right or wrong on the market direction.  It is all about how quickly you change your opinion if you are proved wrong.  Bottom line, markets appear to be choppy but are holding their ground.

Monday, November 26, 2012

Sharp Counter Trend Bounce

I haven't able to post my comments last couple of weeks on the Markets due other commitments post Sandy storm and due to thanksgiving holidays.  Here is my take on the Markets.  Markets have made sharp recovery last week after going down 10% plus from september highs.  Last week was a holiday shortened week.  Nevertheless there were some eager buyers bidding up the Market.  As usual breadth was lacking on the upside move.  Today's action was encouraging in that the Markets held on to their gains.  In the last 5 days the Markets have regained half the losses from september highs.  It remains to be seen how it performs over the course of next couple of days.  The downtrend is in effect until the 143-144 zone is taken out on the SPY.  Until proven otherwise I would consider this action a counter trend bounce and will be on the look out for shorting opportunities.

Tuesday, November 13, 2012

No respite on selling

Markets continue to sell off.  No respite on selling.  What is disturbing though is that the breadth numbers I track are not at extreme territory despite  the sell off.  This means there is more room to downside.  Short positions have continued to work well.  We are in a zone where a bounce could materialize.  But watch the price action of the Markets and do not make any assumption.  The market is in correction and it needs to be played out.  Patience is key.

Wednesday, November 07, 2012

Post Election Verdict of the Markets

The Markets have spoken.  The verdict is clear post US election.  Stocks sold off big time.  Today's sell off should not come as a surprise.  Prior to this day, several leading stocks like AAPL and GOOG were under distribution, markets made new highs on low breadth and was trading choppily and were in correction mode for the last couple of weeks.  If you heeded my advice you would have moved to cash or in net short position a long time ago.  SP500 and Nasdaq down more than 6%, RUT down 7% plus, It is going to take time for this market to settle down and provide any buying opportunity.  Having sold off big time, the next logical move for this market is a bounce which should provide very good shorting opportunities.

Tuesday, October 23, 2012

Market indices tumble once again

Market indices took a big tumble today.  For such a huge drop in the indices the breadth numbers that I track was extremely low.  Having said that the Market was also rallying on extremely low breadth.  All of the leading stocks are now hit hard and would take time to setup.  Any bounce is an opportunity to sell short.  Looks like more pain before a gain.  At this time remaining in cash is the best bet!

Monday, October 22, 2012

Markets Bounce - a logical move

Markets chopped around for an hour from the open, then sold off and then staged a recovery towards the end of the day.  After being hammered on friday, the next logical move for the markets was a bounce and indeed the bounce happened.  AAPL is said to announce a new product tomorrow, perhaps a mini IPAD to take on Amazon and other companies making cheaper tablet.  AAPL was a big mover up almost 4% today

Friday 10/19 - Markets hammered

Markets were hammered and sold off on Friday's session.  The Market action for several days prior to Friday offered many clues as to why a trader or an investor should stay away from the Markets and remain in cash.  Breadth numbers were relatively high on the sell off when compared to prior days. As of now, remain in cash.  If you are an experienced trader shorting opportunities are abound on any bounce.

Thursday, October 18, 2012

Markets stalling at these levels

SPY having gone up 3 days in a row, showed stalling action.  Nasdaq and Russel 2000 indices were already under performing SP-500 and both indices took a hit today.  Interesting day today as GOOG earnings were prematurely released around noon.  Trading on GOOG was halted for about 3 hours.  In the end the earnings report did not go well with GOOG and the stock paid the price.  Many leading stocks are being smacked.   It appears the market is not healthy enough to reward stock buyers on the long side.  If you look at 3 month performance, Financials have been clear leaders.  But, how long can the financials hold the Market up.  Look at the charts of AAPL, GOOG, CMG, PCLN, AMZN, ALGN, MLNX to name a few which tells you something i.e MOVE TO CASH!!!

Wednesday, October 17, 2012

Bounce Follows through into Tuesday

Monday's rally extended to tuesday as well.  All of the indexes bounced from support levels and are quickly approaching resistance at prior highs.  Breadth was lacking in the bounce.  Watching price action one day at time will reward you over the long run than anticipating  which way the Markets would go.

Monday, October 15, 2012

Market sell off contained

Markets bounce back monday from a depressive week of sell offs.  Many leading stocks were rebounding from oversold levels. However, the big picture is still bearish.  AAPL was almost down 12% from it's recent highs and the stock bounced back.  GOOG is down about 5%.  One day doesn't tell if any rally is in the making.  However, the sell off is contained as of now.

Wednesday, October 10, 2012

Markets taking it on the chin

Markets went down without putting up a fight Wednesday.  Dow down 3 consecutive days.  Nasdaq and SPX are down 4 days in a row.  Indexes are approaching oversold levels.  However, there may be more downside before any sort of bounce develop.   IBD's market pulse has switched to 'Market in Correction' due to multiple high volume distribution days in the indexes for the last few weeks.   The damage has been done.  If you are still holding stocks, sell into any bounce and raise cash.  An experienced trader would hedge his or her position with options or play the markets on the short side patiently waiting for an opportune time.  Always stick to your trading plan, accept you will encounter losses.  The goal is to keep the loses to a minimum.  

Monday, October 08, 2012

No Traction in Markets

Once again Gap ups are being sold.  Friday's session was another example.  Markets unable to gain any traction at this time.  At the same time there isn't much selling either.  Still a sideways market which is a where you would lose a lot of money trying to trade aggressively.  Staying in cash is a wise thing to do.

Thursday, October 04, 2012

Upside Break

Market indexes broke to the upside led by financials and break down in bonds.  As usual breadth was missing.  But lack of breadth has been the characteristic of this market either up or down.  Market momentum I track is pointing to more upside.  As long as there is music we dance!

Monday, October 01, 2012

Sideways action - a danger to your portfolio

Markets are choppy after making a new high on sep 14.  Gap ups and any bounce is being sold.  To me there is underlying distribution taking place.  Markets need to push ahead with large number of stocks participating in the move for a rally to sustain.  At this point taking a short position may have a better probability of success than a long position.  It's only during sideways choppy action people try to over trade and lose money.  Cash is also a position.  Wait patiently for the market to setup.

Tuesday, September 25, 2012

Iffy Market

Deteriorating breadth last couple of days.  Extreme bullishness was in the air.  All of the indexes down relatively big today.  It pays to be cautious.  I have been advocating limited exposure to the markets in light of extreme bullishness.  Wait and watch mode to see if any buying comes in to support the markets at these levels.  Be prudent and honor your stops.  Don't let the gains from the last few weeks rally evaporate.

Sunday, September 23, 2012

Flat Market

Markets closed almost flat on Friday's session.  Thursday's action seemed like the rally would gain some momentum.  But Friday's action was complete opposite.  What does this tell you.  This is not time to be fully invested.  Cut your losers.  Let the markets prove that there is more juice for the rally to continue.  A few stocks of interest for a long position.

Thursday, September 20, 2012

Nice Recovery

Markets gapped down at the open and spent the rest of the day recovering.  A little shake out of the weak hands.  The bullish trend is still intact.  Stocks of interest for today.  

Wednesday, September 19, 2012

Sideways Market

Markets are in sideways motion.  However more than a handful of stocks perked up on my scans showing an intent for breaking out of range to the upside.  Markets may have another leg up before some sort of a correction.  Here are some stocks of interest.

Tuesday, September 18, 2012

Market uptrend intact

A lot of bullishness in air.  I would keep my new buys under check.  Probably take a small pilot position to test the waters.  If it works add more.  Healthcare was the leading sector today.  Promptly a few stocks from the same sector showed up on my scans. One stock I have to mention here is AAPL which closed above 700 for the first time.