Your Personal Trader - DJIM Journal 2011

Seemingly after weeks of noting SPX 1307’ish as ‘R” resistance, the market opened firmly on M&A Monday (3 deals) and overshot to 1320 with an eye on 1333 (666X2). Yep, that’s 2x from what we called the ‘Mark of the beast’ , March 10^th,2009…

”Usually, we have a case of mouths calling the market bottoms, nobody is doing that now at this level and instead calls for 500-600 gravity pulls are all over the place. We like this as well for a better chance to get a meaningful bounce from the 'Mark of the Beast' 666 level”.

A devil of a rally proceeded at that time and after a few hiccups along the way, the market finds itself in a midst of a continuous gradual melt up 2 years later. The headwinds of economic data, corporate earnings, money flow away from emerging markets/ bonds, Easy Ben..(Today M&A) outweigh any single ‘day event ‘ tailwind in the Bulls favour. There is absolutely no reason for the shorts to step up and risk being thrown under the bus as per recent ‘Egypt’ situation again. The same premise exists here as it has for months. As long as this lack of tailwinds persists, any pullback will be shallow as dip buyers will come in.

Shadowlist

Momentum/earnings/“winners of ‘10 – Besides AAPL making fresh highs, most winners/momo’s couldn’t be found in the top SP tech performers on the day as it’s pretty quiet following a nice week. As said, CSCO earnings are ahead and are being waited in as are some notable ‘cloud, data center’ names for direction. *SOX was a notable underperformer, it’s been a leader, so it’s lack of participation in market making new highs is some crumbs for the Bears.
Commodities – mostly mixed, DJIM oily/energy linked plays FLS, CRR are holding up well, (GTLS got a pump Cramer job), LNN part of our Ag’/fert rotation play since late Dec hit fresh highs while CLF (steel/coal) keeps hovering around new highs.
Consumer – Our retailer names LULU, FOSL, RL continue to trade well /inline with broader tape. SODA, a Jan alert preceeding its big day from $33 made NCH >$44(new closing high) on addition to IBD 50.
Financials– After flat lining all earnings season was today a wake up? $BKX. Well, a history of headfakes is in it’s blood, so no telling from one day. It is European bank reporting time, so they will likely feed of their reports.