Your Personal Trader - DJIM Journal 09- 1H' 2010

Lately, you can't help but wonder about one thing. Is the new administration of Merry Men, led by "all so promising" Obama, out to bring down the stock market back to medieval times? This ain’t Sherwood Forest!

Announcing plans or strategy to revive economy that do not inspire the Wall Street does have a dire consequence. Constant verbal attacks don’t help, either. Think about it, by displeasing private investors/ market players, market goes down and wealth is destroyed. We’ve already lost a generation of investors we keep hearing due to the experiences of the past year, let’s not loose the pillars. Robin Hood needs to take a breather. As more wealth is destroyed, less funds will be available for investment to revive the economy. Of course, you can't pinpoint the whole issue at the administration because after all, they inherited the problem that WE created over the years. However, because the people elected a new administration to guide into an era of hope, at least show us that you are capable of directing.

Does anyone own those "safe" HMO stocks?   We don't and we feel sorry for those who did tonight as investors got spooked by health care reform. Market went down today despite the strength of bank stocks, maybe in the long run today’s action will lead into a desperately needed leadership change.   There's really no such a thing as a safe stock after todays action in managed healthcare.   There's always cheap stuff around, but nothing is safe these days.    We’d hate to imagine if banks stocks got rolled over today, we’d be right back at recent support. The healthcare is 17% of the SPX500 and we cant’ move forward if its down 4% on the day.

As far as the sentiment goes, we feel people are still feeling a bit mystified by the recent "details" of the bailout plan. There's really no details still as far as toxic assets and bad banks are concerned, but ¾ of the plan details have been released.   In addition, GM gave us another bleak outlook of its problem and we can only guess one of these days, its problem will be addressed by the government.    So, the conclusion is that we basically have more stressful problem going into the weekend than what we started at the beginning of the week.

Technically, SPX 800 is looking more like SPX 900 couple of weeks ago.   It just looks so far out of reach, investors, traders are becoming more and more discouraged. The biggest test is SPX 780 last couple of days and every time we get close, we just get magnetized back down to SPX 750.    With the way this market behaves and the way market digests recent news from D.C., we feel there's a good shot we'd test SPX 742 again tomorrow.    Our trading plan has not changed that much, limit our exposure now and only buy on dips unless there's a clear reversal.    What we do have to prepare ourselves for, at this point, is the notion that we may break SPX 742 and test the lower ground in the coming days, failing once again at 780 gives us a more negative bias.   It's not a fantasy and it's very much a reality.     So based on that assumption, we are allowing market to come down lower before using up all of our buying ammunition.   The plays on our agenda are the good banks, some commodity sec's and ETFs such as SSO/SPY/OIH etc.

Bottom line, it's frustrating out there for just about everyone.    It's a very clear sentiment that are shared by many trading professionals.    For us, the only thing we keep doing these days is not to let the frustration get to us and keep a clear head for trading.