half and half

i am impressed as any permabull out there as to the price action in the dow yesterday - it moved up nice, held its gains, and then closed above resistance. however, check out the volume in the chart below. just because volume wasn't awesome doesn't mean that the dow won't continue higher, but it's just one thing to keep in mind. i've been busy hanging drywall lately, so i haven't had much time to post here. but that's changing soon. i have some good charts lined up.

just another manic monday for the markets?

i doubt it...

just for fun and to test my powers of assessing what the masses are thinking, i try to decide what everyone is expecting, or rather, how should the market behave and/or respond to recent developments. then, just assume that the opposite will happen. we've all done it - but it's actually much harder than it sounds. since i've been following markets and trading, one can rationalize anything that happens after the fact - just the investors in my 20/20 fund (they love the returns). at any rate, i understand that there are various market profiles or perspectives. the retailers vs the institutions vs the daytraders vs the hedge funds, etc - everyone has a different idea of what "should" happen next and why.

that being said, we think that most people were expecting some kind of bounce on friday, and they didn't get it. the dow, nasdog, s&p, etc all closed down. i do think some kind of "real" dead cat bounce will materialize on monday. although the analysis isn't too technical, the blue support line in the chart of the dow just looks like a good place to take a little rest before we continue. we have to work off some of the "oversoldness" of the market. now, if global markets are crashing sunday night (monday for the asian and european markets) - all bets are off. gapping down monday morning will make turn a delicate situation into a disaster.

oh yeah, any retracing would be on low volume.

thanks and the monday stock watchlist still to come!

interesting

this comes to us via tickersense today

any chart requests? and intraday fibonacci retracement lines on the dow

if you'd like to see how i might interpret a stock you are interested in, please feel free to make a request in the comments section.

as for finding short candidates under these conditions, i am scanning for stocks that didn't participate in today's bounce. the dow closed the day up over 50 points - which stocks closed in the red or relatively unchanged? LEH did, and i am sure there are others. relative weakness may be the key, at least for now.

yesterday's huge drop has pushed many of the stocks on my watch list very close to critical 50- and 200-day moving averages as well as critical support and uptrend lines. in my opinion, today's action doesn't say much about where may be going so its still a wait-and-see situation out there...

on days like this (big drops and potential dead cat bouncing) i like to follow the action with the added insight provided by fibonacci retracement lines