Tuesday’s Trading – 9/28/2010

A week ago, I pointed out that the XLF, IWM, and IYT were not validating the SPX’s breakout above 1130, and they still aren’t. In addition to those three laggards is the XLE. If the global economy were on fire, surely the energy stocks would be breaking out, right?

Nevertheless, IWM, IYT, and XLE are all within one day’s march of victory. So, bears should bear (ha, ha) that in mind. Volume on Monday was light, so the selling was not serious.

Both the IWM and IYT are “crawling along” their resistance levels, and that is usually a bullish indication because it shows a relentless eroding of the barrier. The IWM also did not make a lower intra-day low in Monday’s whoosh down into the bell.

The XLE doesn’t look terribly perky, but it did rally on strong volume Friday, and consolidated on light volume Monday, so that’s a bullish posture.

The XLF is the train-wreck of the group. Its rally volume on Friday was ho-hum, and it would probably need two strong days to take out $15.09. Morgan Stanly’s hiring freeze isn’t helping matters.

71 thoughts on “Tuesday’s Trading – 9/28/2010

  1. I still think we started a new Bear Market in April of this year for most indexes, and we will see new lows in 2011. However, we have – “The Very Important Four-Year Presidential Cycle. 2010” coming up, and it looks like many folks have already bought into it in my opinion and are getting positioned.

    http://www.streetsmartreport.com/comm4.html

    Is this why so many are so sure of this rally, and many folks have no fear? I don’t know – It’s a tough call, but I’m holding my short positions for now, until we are no longer overbought and then decide.

    Good trading to all, and this is one tough market for Bulls and Bears!

    Matt,

    Thanks for a great blog!

  2. In the past, when companies tightened their belts their stocks would often go up. Perceived as cost-cutting to be more profitable.

  3. Robo,

    Nice read about the Presidential Cycle. The lawmakers should do everything they can to boost the economy all of the time, not just for votes.

  4. robo…

    im not buying into stock rally till after oct 23

    i did just buy large amounts of TLT premarket @ 104.70 – 104.80

  5. mitch

    i dont care about the economy or any news

    i just look at the chart

    the bond chart says up

    the stock chart says correction continues …then upward blast

  6. p

    Yes, I’m catching the good swings. I was in SKF yesterday so I got that great move this AM.

    Now in the underlying SSO to see if it can make a good move or reverse.

  7. Thursday I will be getting Road Runner Turbo – 10mbps. I currently have RR Lite at 750kbs – which is fine for trading. I used 350kbs for years.

    Think I’ll notice a difference? LOL πŸ™‚

  8. Also getting TW phone service.

    ATT reception for cell phones here at the house is terrible here so I got a ATT Micro Cell. It uses the Internet and gives full 5 bar coverage plus 3G. Works very well.

    It cost $150 to get cell reception at home – how crummy is that?

  9. New high for gold.

    TNX down yesterday and today.

    “Bubble, bubble, toil and trouble”. I know what you’re thinking, “Wizard of Oz”; nope, that was an original stock market quote used in the film. πŸ˜€

    (Just kidding)

  10. Volatility trumps MAs.

    That last SPY move went above the 15min 36MA but no 9/36/15 cross – not even close. However, stochastic and MACD followed price.

    …just sayin’…

  11. SPY has consolidated enough now to allow the 9MA to catch up to the 36MA on the 15min. Not touching yet, but not far to go for the cross.

  12. Phil, this 3:03 trade, is this for short term, medium term, any targets, or have you sold it already ? -g- (3:10 pm now)

  13. WTG… p

    Now you have the inverse to profit from tomorrow. I like it. Hey, I’d buy inverse at any price and sit on it with those two open daily gaps below.

  14. George, looks a lot like the consolidation before the last few dumps.
    VERY comfortable with my shorts πŸ™‚ Buying dips at 112.5 SPY paid off until now, when it fails I am betting on 9 handles. Guessing about halfway through earnings season.

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