You go left, we go right....

Forget about follow throughs for the moment,  up or down, the minute anyone thinks that they have established a trend for the next couple of days, they are proven wrong for the time being.   Nothing drastic will happen until there is NEWS to coincide at the right technical moment.   Meaning, if after Wednesday close, we had good news in the morning, we'd have a chance for a break to the upside.   This will work vice -versa!.   Wednesday night, we were talking here the potential of a rally brewing based on the markets ability to shake off bad news.   Today, you can say that the market is not able to shake off the bad news ( Philly Fed.).   This isn't exactly the data that trumps the other data that the market has shaken off.   So, what's the deal?.   To put things in perspective, no matter how conceivable a short term rally materializing might be at any time, we are still in trouble as far as the economy goes.     This would give those who are staring hard at some of the violated "triangles..wedges" tonight something to always consider.   Excluding the commodity plays on our watchlist,  the playlist has just been crappy on the long side for more than a scalp for a point or two.   We did a few of those with the FLS, FDG, WFR today, but you need to go 500-1000's lots to make it worthwhile.   How many at this rough stage want to risk or can watch the market minute by minute to play a $25k-100k trade for a few grand profit on expensive stocks?.   We figure not many and we can't blame them.  A note, we just did a trial run of Briefing trader.  This service costs $300-350 a month and they are tossing in and out of trades for FSLR for a $1 gain.  Too funny!.   Let's calculate the risk and reward for this to be beneficial for a $200+ stock.   It's hard to get in on many of the new stocks thrown out here recently in this environment,  if you can't do nice size lots.   Still,  these have been around for some time at DJIM and almost all are positive from the initial note.  A medium term swing trader could have made a nice profit from them.   It's all about entry at this stage.    If you snooze, catching up days later is almost useless unless you flip a nice size lot.   Those that have patience are the ones being rewarded on stocks we've liked so far in '08 from DJIM.   Simply,  these are not the days you can buy 500-2000 shares of a $10-20 stock and make a few thousand easy and quickly.   This goes back to our recent words.  Those that thought this gig was easy are going back to their old gigs.  

So what now?   Long the commodities plays and short the rest?    Unconsciously, we have just been doing that it seems, but let's be realistic in these trading times if wanting to go long.  It is probably best to wait for a dip.    Hell, we'd rather go down with the ship-pers, the solars than the Plat', Pall'...basic materials if this was to happen soon than get stuck at the top with a group we haven't been in bed with for a while....        Anyways, why can't this market just generate any kind of rally?    We think the main reason is the lack of any true positive catalyst and plenty of worrisome economic news in the back of the minds of sidelined longs.   RIMM's sub #'s, CSCO's  upgrade try today,  just won't cut it.   It's hard to imagine what the positive catalyst could be in the near term, isn't it?    We probably wouldn't know the positive catalyst until a few days into a move the way its going.     So we have to think eventually, this market will give in to the bad news, especially if you think we are still at the beginning of the recession stage.    It's easier, don't you think?.     Given the recent renewed worry of inflation, things just aren't getting any better fast.    So at this point, are we desperate to seek a rally here?    The technical sign says we are due for a move in either direction and a 50/50 chance that could go either way.    That is if you exclude all of the potential bad news and if you simply look at that triangle.     We all fear that there's more potential for bad news down the pipeline compared to potential good news in the next while.    That is why we have been tilted toward a down move all along.     Sure, market likes to fool us with a move like Wednesday, but then it quickly pours some cold water in our face to get back into reality.   To be honest....This is Best!....so you don't make foolish trading mistakes tomorrow or the next day.

Our strategy right now is that we would take our time when it comes to chasing a rally, but will act quickly if we get a nasty downturn.     Stocks tend to move much slower when going up so by not committing huge and quickly on the first uptick, we'd likely not to get into a sticky situation if this market fakes out the move.   When the opposite happens, we better act quick if we want to take advantage of a market draw down.

Agri/Chem,  this is a first day in a while where we've seen some weakness in this sector.   We aren't going to go in right away and buy the first dip but we'd rather wait for an opportunity when the selling pressure eases.

Oil/Steel, it looks as though this group may need some pullback and we'd wait a bit before entry.

Honestly...this is not the time to go blindly in new sectors to make money!.   Get familiar with the move, the sector, stocks involved with some research.  Maybe this weekend.   Ask yourself is this worth getting in as was the Solars, the Shippers, the China stocks in '07?.  How long will this last?. 

Shippers, this is a group of particular interest to us.    Believe it or not, this was actually the best behaving group on our screen today and we couldn't help but wonder about the strength in this group.  Maybe, its the idea of shipping all those expensive Basic materials.   In any case, we'd probably want to be in this group if this market turns green.

Solars, note yesterdays note as for playing these now.  Besides FSLR, it is best to stick to the poly suppliers as plays.  WFR, LDK.  Btw. LDK has nice news here this morning it seems.  Still, we'd probably sell into it if exuberance is shown.

Bottom line, this isn't a market that's friendly to traders.    Sometimes without knowing which direction things would be, it means none of us have an edge to have a proper trading strategy other than to fade the move.    Right now,  we wait until we stop hearing about this triangle thing.   Symmetrical triangles show a ZERO bias for either outcome, a formation of perfect balance.   Yeah, a perfect balance to drive you nuts is more like it!.     A few of those triangles were somewhat violated to the downside, but still eventually held for the time being on little help as in volume.  That's good at least as it didn't take much effort.  The key here is the financials, you can't break without them to either side.  Yesterday, they were not that bad and so without news from them it is hard to breakdown substantially.   

So FWIW, unless there is bad news from their end in the morning, we probably reverse and half ass rally at some point in the day. 

Have a nice weekend!