No doubt this is a rough stock market to earn money in while we have the kind of sideways stock trading we have been in this week. However the last thing you want me to do is to play some type of balancing on both sides of the fence slant like John Murphy or Arthur Hill take. You want me to give you my view of the stock market and how I am playing it right now, not the spectacle about how I don't give buy and sell opinions and instead only talk about the technicals.
I proclaim if you are incapable of forming definite buy and sell recommendations based on your technical analysis, then what good is your technical analysis? The only reason we do technical analysis is to make money. If you are not making money with your technical analysis then it is meaningless to you, you might as well throw your technical analysis in the hogwash canal.
The Russell 2000 and the Nasdaq are leading the S&P 500 and the Dow lower. This is a bearish sign for the stock market.
The S&P 500 is in a downtrend. It has strengthened from the strong downtrend we had a couple of days ago. Does this predict our shorts are in danger? No. It is still a downtrend. Not as strong a downtrend as we like, but nevertheless a downtrend.
I am holding my short play on Consumer Services (SCC). SCC is in a very weak uptrend. The same reasoning applies to distinct stocks as it does the key indices. It is still an uptrend, even if it is not as strong as I would like.
I could have been writing a very different opinion to you today had it not been for Bernanke's comments today which resulted in a massive sell off going into market close. Bernanke established what us stock traders have recognized for weeks now, the economic recovery is in jeopardy.
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