Your Personal Trader - DJIM Journal 2011

Once again a seemingly ‘oblivious’ US market in premarket/opening bell shrugging off a 3% decline in the Shang due to more tightening fears changed course quickly in just 2 hours. As soon as 1277 fell, 20ma at 1271 was smacked on the head. Yesterday.. “Technical- Support 1277 ish on a close basis, followed by 20ma pretty easily if busted”. Considering there was little premarket negativity/ no gap down indicating a shot at the 20ma this day, the fact it happened brought in bargain hunters (see below on who moved) that would not have come otherwise. Usually they wait for some stability following a day like Wednesday, but this time they couldn’t ignore an important ‘technical’ benchmark. In all, it was good to see it recoup above 1277 on a closing basis, but hardly a game changer. ..”It’s been a good 6 weeks without coming close to the 20ma, market can use a visit. ” . The fact 20ma was so easily accessible makes you think another visit is not far away.

Shadowlist

Momentum/earnings/“winners of ‘10 – Thanks to FFIV , many small caps took a licking and not just popular '10 momo names, but more mid cap winner stuff. You could see this by the RUT underperformance( down 1%) to the SPX. There was little bounce evidence and considering most have broken 9ema handily we'd only trade 'intraday'. It’s probably better to wait for pre-earnings move on many individual names. *Likely, FFIV has given this ‘blessing’ oppy for pre-runs and better earnings reaction as they’ve reset the bar low.
Commodities - All the policy/tightening, global hikes are taking it’s toll. Only coals really came off the lows, but that’s more due to fact they’ve been coming down for 5 days already.
Financials - After 2 days of selling, bargain hunters came in. It’s not that MS report was great, it’s more of a function you weren’t as bad GS and C. This is hopefully a change in earnings reaction going forward and is the same thing FFIV may have provided. Simply, if you don’t suck as much as GS and/or FFIV, we won’t damage you too badly and if you produce, we'll thank you by buying up your stock.