X, BNI, and NSC broke above their resistance areas during today's move and would need to move back below that resistance before I would consider them for bearish trades. I mentioned yesterday about watching the financial stocks. They seem to be leading the market. If that is true, then today's stale move in financials could mean that we might be ready to pull back a bit. We are sitting at some resistance levels in the DOW, S&P 500, and Nasdaq. If they are going to pull back, this is when they should do it. Volume was lower today than yesterday, even though we reached higher highs. In the past two days there have been fewer and fewer stocks participating in the rally. This divergence could be another clue to a possible correction. The volume on the at-the-money puts for the SPY and the DIA was higher than the open interest. In other words, there are a lot of people today betting against a higher move. I will be watching these resistance levels very closely tomorrow. If we break above resistance, there will probably be a short squeeze that will push us even higher. If we sell off, we will look closely for support levels to hold. This is not a great place for new trades so I won't list any new stocks today. I am waiting for confirmation of the next likely market move.Thursday, March 26, 2009
RESISTANCE?
The market continues to be impressive during this rally. AAPL, MOS, MU, and ATML all moved up nicely. CS
X, BNI, and NSC broke above their resistance areas during today's move and would need to move back below that resistance before I would consider them for bearish trades. I mentioned yesterday about watching the financial stocks. They seem to be leading the market. If that is true, then today's stale move in financials could mean that we might be ready to pull back a bit. We are sitting at some resistance levels in the DOW, S&P 500, and Nasdaq. If they are going to pull back, this is when they should do it. Volume was lower today than yesterday, even though we reached higher highs. In the past two days there have been fewer and fewer stocks participating in the rally. This divergence could be another clue to a possible correction. The volume on the at-the-money puts for the SPY and the DIA was higher than the open interest. In other words, there are a lot of people today betting against a higher move. I will be watching these resistance levels very closely tomorrow. If we break above resistance, there will probably be a short squeeze that will push us even higher. If we sell off, we will look closely for support levels to hold. This is not a great place for new trades so I won't list any new stocks today. I am waiting for confirmation of the next likely market move.
X, BNI, and NSC broke above their resistance areas during today's move and would need to move back below that resistance before I would consider them for bearish trades. I mentioned yesterday about watching the financial stocks. They seem to be leading the market. If that is true, then today's stale move in financials could mean that we might be ready to pull back a bit. We are sitting at some resistance levels in the DOW, S&P 500, and Nasdaq. If they are going to pull back, this is when they should do it. Volume was lower today than yesterday, even though we reached higher highs. In the past two days there have been fewer and fewer stocks participating in the rally. This divergence could be another clue to a possible correction. The volume on the at-the-money puts for the SPY and the DIA was higher than the open interest. In other words, there are a lot of people today betting against a higher move. I will be watching these resistance levels very closely tomorrow. If we break above resistance, there will probably be a short squeeze that will push us even higher. If we sell off, we will look closely for support levels to hold. This is not a great place for new trades so I won't list any new stocks today. I am waiting for confirmation of the next likely market move.
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