Todays Market Commentary

I got into FLSH for a risk of 28 cents based upon my execution. We ended up with a very nice trend day up in the markets and I got out of half of it on the close, up nearly $1 for a great trade on a risk to reward basis. I will hold the rest with a breakeven stop and see what I can pull out of this one over the next several days.

Brandon

 

Sep 6: Market run into resistance level and end sharply higher.



A pretty bull Tuesday we got today with indexes crossing some of the mentioned resistance level, and hold above those level the rest of the session but not too far from those levels.

39,20 was the key level on QQQQ to the upside and was crossed early in the morning without a major test into the late afternoon. Now the Nasdaq100 tracking stock must hold near that area to build another “bull leg”, then, the 39.20 area as well 39.00 are the main support on any sell-off from here, the trend, for now on, remain healthy even with the stock “painting” the 39.35 zone on the charts the all session, sp was a completely different history.

The Standard and Poor’s 500 index was a laggard during the first hour of trading and a good runner into the closure. Anyway, the index find the way to cross prior high (of the last month on 1227) but run out of gas on his way up and spent the rest of the noon during the 1230 area, at the close the benchmark was the bull note running 5 points to close near 1234-5, this index ,also left the prior zone as main support level now near the 1215-6 area and 1222-3 as intermediate support. An important thing to remark is the cross of 200 EMA in 60 minutes candles.

Dow was also a winner crossing the cited 10500/30 level and leaving “bear ghosts” behind with that cross, anyway, the indexes (like the specific case of the Dow) end the session a little overbought and could give us some correction tomorrow morning. Now any sell-off into the 10500/10 area could be a good “buy the dip”, of course with stops near 10480/90

So, looks like It was a day when we cross the resistance level, we got a bull “hint” about the future but end the session near from old resistance and leaves with suspense for the next sessions.

My point of view for the next session is: Ride the market long for now on near the support areas and depending of the tomorrow opening. In QQQQ terms, I’ll like to go long 39.20/22 or 39.01/3 (each with stop no longer than 5 cents) and may be above those levels if we get a bull opening crossing 39.35. I’m not going to short until the 39.60/65 , anyway, this is what I’m saying now and this could change after the first 2-3 hours tomorrow if the market make a peak on a new intermediate level.

The rest of the index I like to trade in the same way, I mean, long near the resistance levels now become in support level with ultra-tight stops.

Diego M Rolando, September 6, 2005, roc@roclerman.com

 

Yesterday was the strong day in the market that I had been waiting for. Too bad no one seemed to be home. Volume came in lower than even last Weds and Thursday. This is obviously not the best thing that could happen. Price action, however, was very nice. I have a number of longs now that I will be sticking with using trailing stops. I still feel we are set up for a short squeeze that could take us up 15 to 20% over the next few months.

Brandon

PS.. I think Bill Gross is the smartest guy on the street. If I had to pick one person to listen to and heed his every word it would be Mr Gross. His Sept comments are quiet bearish:http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO+September+2005.htm

 

I always enjoy your commentary. I don't read it on time every day, but I print it out and go over it when I have time. Keep sharing the knowledge. Thanks.

 

brandon ... I do not see this happening but if it does
... I hope you are positioned for it

- I still feel we are set up for a short squeeze
that could take us up 15 to 20% over the next few months.-

 

Oil prices continued to move lower yesterday and equities continued to move higher in spite of Katrina. OPEC released a statement saying they are currently pumping 1million excess barrels per day onto the global market. This should continue to put preasure on the price of oil. As I said this weekend, closet bears. Oil is not the place to be on the long side. I have been short Nov Futures since Monday of last week and at this point I do suspect the market will rally, but it looks as though it could easily form an avalanche. If that happens I will add to my short position.

The S&P500 gained 2.97 points and closed at 1236.36 while the Nasdaq Composite gained 5.17 and closed at 2172.03. Volume was heavier on both exchanges as stocks advanced, a good sign. Another good sign was that the markets spent a good bit of the day chopping around, and then moved higher into the close. This choppy action shakes the weak hands out who got involved on Tuesdays trend day higher. The buying in the last hour or so of the day shows continued PROFESSIONAL involment in the markets. New highs continue to generally expand on all exchanges, another good sign. People still continue to talk about the new bankrupcy laws, Katrina and high oil prices being the perfect storm that is going to kill the market. The market continues to go higher. I have met a lot of smart people in the time I have traded, but most of them get killed when they try to fight the market. Its a bit like picking a fight with my older brother Curt, who is 6-5 210lbs and a Sgt in the 3rd Special Forces group. Maybe someone can beat him, but I tend to always lose so I gave up a long time ago. Of course Mom goes about 5-3 and weighs 90lbs soaking wet with a pocket full of nickles, and she scares the hell out of him when she is mad. There is some sort of justice in the world!

Right now the market is looking at every single report coming out for hints of what the Fed might be doing in two weeks. The prevailing wisdom is that they will stop cutting rates for at least one cycle to see what the impact of their prire hikes and Katrina might be. Of course Mr Moskow of the Chicago Fed yesterday was quiet hawkish and bonds have been selling off for the last two days. This is something that will be critical to watch because I do think that if rates start to rise again the market will sell off as a result, ending our little rally.

I still like all of the same sectors mentioned in my large report this weekend. Continue to watch them. At this point I am about 75% invested with longs in BOBJ, AMD, FLSH, BRCM, MO, TNB, IWM and shorts in BEBE and FNM. I will continue to watch all of these for opportunities to add to the positions on pullbacks with light volume, with the exception of AMD. I am also watching CME and a stock I will be putting in a special edition of the small cap newsletter tonight. I will not initiate a position in it unitl the letter comes out.

At this point I think we can be fairly aggressive. If you do not have positions on right now, it is not the time to jump up and down like a child and grab them though. You need to just be patient and realize that no market goes straight up. There are good stocks out there and they will pullback. You can pick up your exposure there.

And last but not least. Red Cross. If anything I have ever said has helped you please donate. http://store.yahoo.com/redcross-donate3/

 

BTW, our room on hotcomm remains open to the general public at this time. Please feel free to stop by. We are on Relay 10 in Mainstreet.

Brandon

 

SWING TRADE: SHORT SETUP BEBE under 18.15. Stops above 18.60

 

http://www.position4profit.com/videos/sept9.html

 

Generally speaking I do a scanning session two or three nights per week plus on Saturday morning in the hotcomm room. Tonight I recorded the audio from the group. http://www.position4profit.com/videos/scanning.html

Brandon