(Note: I’m still on semi-vacation. Posting will resume its normal pace in September.)
So, has anything exciting happened in the markets since I’ve been gone? 
I’ve been trying hard not to look at the market during the day for the last week or so but it’s been tough not to peek. It’s been a long time since I’ve seen volatility like this. I hope you all are managing well and and faring better than some of these hedge funds. I heard a term on CNBC this morning which perfectly describes what’s going on in the fund space now — “economic Darwinism”. Basically these clowns who have been entrusted with billions of dollars and don’t know how to manage risk and are over-leveraged. What I wrote about Amaranth goes for these funds we seem to hear about daily (like BNP Paribas, which is stinking up the joint today after saying just last week that all was good.)
Anyway, I thought I’d take a quick look at the indices and update the trend table. The Nasdaq and S&P have both had three strong days of gains. Their moves, while impressive, have just retraced about 50% of the recent losses. In fact, both indices stopped dead at their middle Bollinger Bands yesterday. Bulls will want to see closes above those lines. It’s also interesting to note that On-Balance Volume is positively divergent on both indices. They say price follows volume and OBV is saying price goes higher. As always, we shall see.
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Down |
| Intermediate | Lat | Down | Down |
| Short-term | Up | Up | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
any chance you can look at aapl? it seems like it broke the lower bollinger band
I’ll try to post it in the morning. Otherwise, look for it over the weekend along with a walk through the indices.
Hi Mike,
I’ve been reading your blog with interest. Especially the parts on swing trading and fundamental analysis. I recently took a course which claimed that linking the two is advantageous. In short, use fundamentals to screen for quality companies, create a watchlist and then examine with technicals. For going long only. I’ve read a lot more since but I’m can’t find any validation of this approach.
I read this from you ‘My position on the TA vs. FA debate has always been that there’s a place for both. I think it makes a whole lot of sense to combine the two. But the more long-term focused a person is the more he should focus on fundamentals. Conversely in the very short term fundies are not very useful as timing tools but technicals are great for that. That’s why I rely on technicals for my short-term trading. For my longer term accounts, I (usually) combine both types of analysis.’
Do you have an opinion on combining them in the sole context of swing trading?
Cheers – Phil