Posted by 16 February 2009

February 13 2009 Stock Market Recap

I think (and hope) we’re getting to the point where the market will no longer be focused on TARP & stimulus announcements from the government. On Friday both the S&P 500 and Nasdaq traded at prices they traded at on October 10th, the first major reaction low in autumn. So one could argue that we’ve been in a holding pattern for four months now. That’s a good sized base which should lead to a solid move out of that base whenever the right impetus comes along. I think the odds of a breakdown are sightly higher than a breakout because of the 200 and 50-day moving averages and that the triangles being built are usually continuation patterns.

Trend Table

no changes

Trend Nasdaq S&P 500 Russell 2000
Long-Term Down Down Down
Intermediate Lat Down Down
Short-term Lat Down Down

(+) 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.

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Comments

  1. Posted by davy lind on February 16, 2009 at 8:08 pm

    I agree, but sector rotation will work if you are DD inclined. Please respond.

  2. Posted by Stockpunk on February 16, 2009 at 9:54 pm

    Mike,

    Have you had to modify the way you trade over the last 6 months? Are you focusing more on trading indexes than individual stocks. I’m just wondering if using narrow candles has created issues with the market being so ridiculously volatile.

  3. Posted by Michael on February 16, 2009 at 10:00 pm

    Davy, what does DD mean?

    Stockpunk, the only change I’ve made is cutting my risk in half b/c of the volatility. I told myself I wouldn’t go back to my normal R until the VIX broke 40 but I’m getting tempted to raise it back up a bit.

  4. Posted by Gene M.Batt on February 17, 2009 at 8:38 pm

    Now we have a break of 800.Do you get aggressive short or wait for the first bounce?

  5. Posted by Michael on February 17, 2009 at 9:05 pm

    I’d like to think that if I was still swing trading I would have gotten in today. If I wasn’t in I’d probably wait for a little bounce to jump in.

    For me, daytrading-wise, it just depends on what setups present themselves. I’m certainly MUCH less concerned about upside reversals here but that could change quickly if, say, the S&P gaps down close to the November low.