..the right "stuff"

It’s only one day,  but the market got some of the ‘wait and see’  stuff that is needed for it to feel better about Europe and itself.   We alerted pre-market to the Portugal successful bond issue/ tax hikes, we also later heard about Spain’s austerity plans and Greece received a 5.5bln instalment to blow out the Ouzo.   All this leads to tightening of CDS spreads in these countries showcasing the bailout is becoming acceptable to the markets.   The biggest drops prior to last weeks plunge were the Euro banks and as we see clearly, they are acting just fine to this point.   These are signals the market was/ is looking for to rally today.  Simply, ‘it’s not the Euro ’ that is dictating the confidence and thus the market.   It’s CDS spreads, issuance of debt successfully, European banks action that is the wait and see stuff.   It's the collaborating evidence to ease systemic risk.   Those relying on the Euro for trading are behind the curve.  

Yesterday, ‘No specific reason for sell off, which is good news”.   Once again the market showed what we’ve pointed out numerous days…if there is a bunch of small catalysts that really seem insignificant, it usually means we see dip buyers arriving soon.

On the home front,  it was back to business!.  We had M&A activity and ‘back to earnings” related positive flow from IBM INTC analysts meetings.  

Technically-  yes, it is very technically minded market now!.   Before the plunge, May 5th close, we said…“Today’s breakdown to 1156 taking out the last support at 1170 and not closing above  it pretty well confirms we are in a May correction.    Mayday Mayday is the distress signal from Europe that has put the market in this unstable position.   Add, the China curbs creating a possible slowdown in many eyes and we're likely due for a rocky month.   Any push higher/bounce now and we are looking at "S"upport at 1180/1185 now being "R"esistance.".   We are sticking to this, so the market may have a little closet space, but we're not seeing 'conviction buying' enter to think we can push higher now.   Considering this was noted before the plunge, it is seemingly ‘double’ the resistance as we’ve come a long way back up in a very short period of time!.

Our trading methodology here has been keep trades 24/48 hours and be very selective and it’s best we keep to this as we come into market "R".   We’ve alerted 3 stocks in May,  all "safe harbors" and earnings related.  VCI  twice. first at $30 to $34 before plunge and a few days ago for a breakout in 33’s to a high of $36 today.  GEOY  $28-31 in two days and SXCI  to a hot $70 yesterday after oppy’s to pick up all the way down to $58 since alerted last week.   That’s a lot of points between them during market turmoil, a few thousand shares in those names is better than 500-1000 shares of even an AAPL momo' type in taking up trading dollars and it comes without the stress.