Online Stock Trading | Market thoughts

Market thoughts


Filed Under Market Commentary |

Friday we saw a nice bounce from recent lows on strong volume. A sign that there MAY (I use this with the utmost caution) some accumulation in this market. The Standard and Poors 500 showed a nice bounce of its 200dma moving average. It was the highest volume the index has seen since December 16th of 2005. We must stay on the side of caution here. Why? As a speculator I need to be confirmed that either the downtrend has ended or a downtrend has begun. After the 5th day of distribution on the Nasdaq almost 2 weeks ago, this confirmed that the market was going to turn over in the short-term. What happened, the bottom near fell out to the 200dma. As I built up cash I will remain patient until the market decides which way it’d like to confirm its going. We have 1 day of an attempted rally on our hands. By Thursday we need to see another rally attempt on strong volume, above 50dma volue…preferably the same level as we saw on Friday. In this time, if we see a distribution day, I am afraid that our chances of a rally are slim to none. This is why we must remain mostly in cash and start trimming our big gains. Stay on the look out for a distribution days on the horizon.

Mkt Spec

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