The market definitely did not act the way I figured it would after yesterdays reversal. This is either a great way to wash out bears and bulls, or the market is one confused son-0f-a-gun. However we are still holding on above the lows of yesterday. So we have not killed this rally attempt yet.
The two failed bounces at support has held up and that is what is needed to create a decent bottom, if we are in fact building one. The one thing, for sure, is that this creates a higher level of bearishness with the wild volatility. This allows the weak holders to sell into the smart money hands and sets a stage for a possible rally.
But with all this possible bottom talk, we have to remember, that the averages are still trading below their key 50 and 200 day moving averages. Along with that, the trend of the 50 dma is down. This adds more pressure to the resistance, as time goes by and price declines. I can not believe I did not mention yesterday that the markets may not rally because of the fact the 50 dma is trending down and the indexes are all trading below this key average.
So it is up in the air. Up or down. I dont know but up is my guess with the reversal we had yesterday. I am not finding a lot of new longs but I think this is because their is an obvious sector rotation happening out there. The top 40 industries in IBD Industry Groups that have moved up the most the past 3 months is a great place to look for the next leading industry.
I left a ton of money on the table today, by covering my shorts in the morning. I could kill myself because as you saw today oil stocks fell quite nicely. I had enough oil shorts along with other shorts that fell over 5% today to make the month quite a nice month. Instead I might end the month with a loss.
Oh well that is trading. I have to keep to my style, because you never know when the market will take off. If I take the week off, I might miss on the "great longs" that come up on my scans. I might miss the next TASR(2003) or LMLP(1999) on the long side. Or miss the next ENGA (2000) or any Airlines (2002) on the short side. That is the kind of money that can make being a trader very rewarding.
Good luck out there!!! We need all the luck we can get.
New Swing Longs: PAYX VDSI ISIL HAR UB
Longs Outperforming Market: NUHC LDSH KNOT BRLC AAPL SUPX THRX
New Swing Shorts: PLCM TLM ECA EPEX BGG PVX BAK USTR RESP SID KCS BTU STLD XRX UTEK NUE CAL
Shorts Outperforming Market: Sadly - None. I covered my new shorts too early and missed out on a LOT of gains. Did you see oil stocks today??
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