DJIM #21 2009
Tuesday, May 26, 2009 at 07:27AM Friday’s last hour gyrations just exemplified the week that was. Most notably, a week of low volume encompassing a triple rally day and a 40+SPX point sell off to close off just where we had opened Monday morning at $SPX ~885-887. A clumsy week and no promises of the tape improving with little or no news flow expectations in the way of eco’ data points in a shortened 4 day trading week.
One area of significance is the 20ma to watch. We’ve talked about this being the support line for the advancement since March and with Friday’s close under it, we will watch more carefully. We don’t want to see any meaningful close under this level in the upcoming week. The only thing last week accomplished was this 20ma line moving higher day by day, while the market tape accomplished nothing by Friday's close. Right now, the tape looks vulnerable as it won’t take much to get that negative close. Basically, any break of Thursday reversal lows at 879 to 875(range low) will be one of caution. A huge TSY issuance this week along with an eye on if the FED will pick up the pace of their purchasing will be closely watched.
As far as individual stocks/ groups, the picture is just as murky as the broad tape with no signs of rotation into a particular group. The banks- brokers lagged any upside last week and the Techs, despite better than expected results and outlooks went pretty well unnoticed or cared for. The $USD watch will lead the commod’ trade, most likely. Also, we'd wait for a $CRX breakout (if) for now to initate fresh positions.
We just have to wait it out here and be selective if going in for a trade.