DJIM #30 2008

Finishing up the week, we couldn't help but feel there was something rotten about this market, or the market action in the past few days.   Guess, the market being down on the week almost every week this summer just doesn't smell good.  Oh yes,  you can always find intraday plays that can fullfill a trader's needs and there hasn't been shortage of that.   The problem, we are finding here is that those plays can change from financials to commods to techs to anything else on a daily basis.    Basically, as a position trader, who'd want to carry momentum on a particular sector or play, there's simply no such opportunity.

Overall, this market is still trying to climb out of the low it hit in middle July.   It's definitely being helped by the recent decline of energy prices and renewed confidence of financial stocks.    Well, the only catch we feel here is that any trend of declining energy price and renewed confidence of financial stocks will be short lived.   Of course, only time can prove what will actually happen.     One thing is for sure though, so far, this earning period has been a disappointment, across the board.   We just haven't seen an eps report which gives us the urge that "we must buy this stock"!     Yes, reports like ILMN, AXYS or even VISN are playable, but none of the reports that we've seen can give us that multi week drive we were looking for.   The only saving grace so far, is that we still have lots of small and middle cap stocks to release reports, many of our recent group stocks starting this week. (see earnings dates link)

Commodity plays,  you got to either love them or hate these battered groups.   Right now, most of us will probably be in the latter camp.   Every mini rally attempt always ended up in a disaster a couple of days later.    This of course has everything to do with the decline of crude oil.   The inability of a bounce in crude just seems to spread out the fear onto every other commodity sector.    For example, the great POT eps report couldn't ignite the agri. sector, yet the coals bounced of the ACI report.  long Will this last  coal move last is the simple question?.   Basically, we have to see better action all across the commodity sector and a lift in crude price in order to gain confidence back into trading our favourite names.    For now, we simply watch and use the occasional intraday opportunity to play a point or two off the fast movers.

Bottom line, we are nearing the end of July and this is historically a weak and wishy washy trading environment.     What we focus right now is finding bright spots in the earning reports until we begin to feel we're back to a comfort zone in this market.   Essentially, all we need is a few good reports to carry us into the fall trading season.