DJIM 39, 2009

Last week, we had this market cooling post FOMC for 3 days.    As we have said previously, this market can start and stop on a dime, unfortunately it works both ways.   At least, we entered the week with ..” we are going into a FED/ IPO/ RIMM week with a continued ‘cautious’ stance noted late last week.   This is not a fear factor,  it’s just prudent money management of narrowing down number and sizes of positions awaiting a new catalyst".    Also, we alluded to a possible sell-off post FOMC, if some language was not removed from the statement.   The point we’re making is any big damage was avoidable to all of our books.   At Friday’s close,  we can only say we’re glad this market is able to pullback, as well, as shoot up.    At this particular time, we are also quite glad the market has paused right before the earning season starts on low volume.   There was no panic evident in the drop.

Currently, we are sitting at SPX 1045,  but it doesn't matter that much as if we can easily come down to SPX 1035 in the coming days.  This would be a true test of support/ underlying bid.   We’re still 2 weeks away from earnings season,  but we do have the always important NFP to close off the week as the highlight.   Right now, we aren't expecting to see any surprises from the Economic side of things, ( a few headwinds appeared ) and as long as the trend stays the same,  it'll keep market participants somewhat happy.    On the earning side,  we're hoping to see the kind of reports that are opposite of RIMM's.    What we will be doing now is going through our Shadowlist, mostly for last Q’s additions (see Sept 15th Journal entry for current  list) that have a chance to pre-run before the earning reports.    Note,  we don't want to be too early on those possible pre-run setups,  but we don't want to be too late either.

Coming into the week,  we are hoping the dip brings in end of Q window dressing.   The upside risk is simply too overwhelming to ignore for most of the big money.