Matt Trivisonno’s Blog

With oil down almost $5 today, you might have expected a to see a gigantic rally in stocks. But it didn’t happen, and today’s action once again underscores the weakness of this market.

SPY, QQQQ, IWM, and XLF all had increased volume, so it does look like some of the money coming out of oil rotated into those ETF’s. However, a day like today is perfect for large institutions to dump a lot of stock with nobody noticing. The jump in SPY volume probably should have produced a larger gain, but perhaps a big-dog was selling hard into the rally…

SPY, IWM, and XLF remained within their down-trend channels, though QQQQ is now peeking above it’s down-trend line. Normally, you want to see a 2-3% penetration of a trend-line before declaring it defunct, and QQQQ has not achieved that yet.

The model that I use didn’t quite make it to a short-term over-bought reading today, but just before the close I bought some more QQQQ puts.

Oddly enough, the bull-flag formation on the oil chart that I wrote about yesterday is still intact. USO moved down to the lower-end of its recent trading range, and today’s big drop moved USO from short-term over-bought to short-term over-sold. So, today may have only served to coil-up oil for a strike higher. However, the pick-up in volume is not something that you want to see in a bull-flag. Gun-to-head, I would buy it. The fact that the chart didn’t breakdown after news of price-hikes in China, and higher production from Saudi Arabia, is pretty remarkable. The oil price-chart remains in a very strong pattern.

The lies from the bankers continued today with Citigroup taking the top spot on Mount Lie-More. Once again I ask, what good is fundamental analysis of these companies when all that you have to analyze are lies?

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This entry was posted on Thursday, June 19th, 2008 at 3:54 pm and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.