Friday
Jul132012
Ahead of the open, (13-07)
Friday, July 13, 2012 at 07:53AM Market losing streak hits 6 days, but magnet to the 50MA extends for a 3rd day increasing the odds that a dead cat bounce began today. The state of the market is so dour that today’s bounce off lows to its peak (~15 SP handles) was a celebration of sorts. Unfortunately, 10 minutes before the close the party goers petered out and SP gave back half of the bounce to end off ~7 pts. Still, market did reclaim the 50MA by a whisker and the longer this lasts, the better the odds this downward trend exhausts itself short term. If anything, today showed the shorts are not so confident to press the market lower in fear of upside risk headlines. This usually indicates the market stays range bound until a fresh catalyst emerges as both sides lack conviction.
In all, an extension of the bounce is possible off the better than feared China data dump, but if sitting back and waiting as discussed early in the week for surprises in single stock 2H outlooks…why not wait it out some more. Although the L-streak is at 6 days, it’s hardly been ‘juicy’ to step in size as the market is hardly off that much.
Adding a few stocks to the Shadowlist, good ole NFLX (~$85) makes a return and YELP (~$22), the former for the squeeze factor and the latter for a bounce at this point (was just ~28).
Overall both may have a Shadowlist shelf life for longer term and not just be chartist’ potential plays as they appear to be now.