Persistent..

We have always asked ourselves question like this "does a quick rebound back to the previous resistance be trustworthy?"  So far in 2009, nothing behaved in a logical and conventional way.  This also includes the technical side of this market.  We spent most of the day hovering around SPX 1098 and it is exactly where we closed at.   After such a quick and powerful rebound, we just had a 2 day pause without giving back any ground from this market is considered a victory to us.  This is evidenced by the sea of green on our watchlist despite a market pause.

If you ask most traders about what they think of current market,  they'd tell you to be cautious and it'd be risky to chase any move at this point.   We can also tell you that secretly everyone wished they'd load up all of the things at five or ten percent below the current level.  Unfortunately, this game is not about "what you should've or could've done!", and it's all about "what are you going to do now"?  We at DJIM are currently holding enough quality plays with a balanced(as we talked about yesterday) mix that if we get a leg up, we would be happy.  If we have a pullback from here, we'd have plenty of cash to add to the dips as we believe buyers are looking for any weakness.  So, really it is about being comfortable with what you holding.   The comfort level is different for everyone, but we'd imagine at some point every one of us will know what level of equity level would make us sleep well at night.  Basically, at this point, we are feeling confident about the remainder of the year.  Many earning reports have exceeded the high expectation and Econ. data has been up to task as well.  So, this market does not need a super drive up toward the end of year.  All we ask is to hold the recent high level and perhaps make a little progress upwards as we move toward new year.

AMC, we had HPQ pre-announced a slightly better guidance and an acquisition of a tech. company 3Com.   Well, any acquisition in these days are viewed as positive and there has been about 10+ in this tech space recently.   There were also two very interesting earning reports from GMCR & CTRP, which will definitely get some action tomorrow.  While CTRP's report is a no brainer given the AH reaction, we feel GMCR's reaction can be a little misleading.  We remember the exact same event took place for GMCR during last quarter's earning reaction AMC, the stock went up the next day.  If PEET' s is weak in sympathy tomorrow, we won't be hesitant to catch it on the bid. *At this point buyers are not only looking to buy the broad market dips, they also look at individual plays that dip by themselves to get exposure.   The market is probably finished with 5% corrections for 2009, so you have to be selective and look for individual buys if no negative catalytic newsflow comes rest of 2009 to get in.  Example is 24hrs ago, MELI  was under $43 in early trading, today you could have unleashed some near $36, if you bought the dip of a good eps play.  In addition,  we'd be looking at UTA  to see if it can catch any CTRP sympathy trade before it reports next week.   

We have to say things are looking pretty good at this moment.  If financial heavy weights such as JPM or GS can lead the sector with a strong move higher, we'd be looking at SPX 1100 in the rear view mirror in no time.  Unfortunately, today they gave up early gains and market followed suit from new SPX highs.