October 12th 2011 Market Recap

There will be no recap tomorrow as I will not be around to catch the market action. Recaps will resume on Monday.

Even with the negative earnings report from Alcoa (AA) the market had another positive session today, pushing the indices to the upper limits of their recent ranges. Mark from Fundmymutualfund recapped an excellent post from the NYT citing declining imports. Worth a read.

A market moving up despite the overbought readings is bullish. The lower volume is a concern but it has not stopped the market from moving higher before.

Looking ahead the big question is do we have enough momentum to claim higher highs and break above key resistance before this rally stalls out? At this point a pull back to say the 50 MA would be welcomed.

A S&P break above 1230 would almost certainly force the average investor to become bullish on this market and start putting cash to work. These price swings are so quick though it is certainly tough to confidently put capital to work.

Time to sharpen those watch lists and keep an eye out for stocks basing out. Stay frosty out there, keep an eye on earnings, and I will see you back here for more market recaps after the weekend. 8-)

Comments

  1. Posted by Maksym on October 13, 2011 at 2:08 am

    Saving chart images in PNG format would be a much better idea.

  2. Posted by FrugalTrader on October 13, 2011 at 9:05 am

    Hey Blain,
    First time I’ve been to this site in a long time and noticed that you took it over, congrats! Really enjoying the market recaps. You are certainly right that with the volatility it’s tough to have the confidence to put a significant portion of cash to work.

  3. Posted by Martin on October 13, 2011 at 3:05 pm

    I am not much positive that this market sustains this growth. Look what’s behind it! Just hopes! But the real data are weak. In my opinion this is just a hype and we are going back, trading in the sideways channel.

  4. Posted by Blain on October 13, 2011 at 3:20 pm

    Great to see you stop by FT! I acquired the site in January this year. It has been fun but fairly tough to manage content for two sites!

    RE PNG images. Why do you feel those are better than jpg?

  5. Posted by Blain on October 13, 2011 at 3:51 pm

    The length and volatility of this current channel falls right in line with your thoughts.

    I am also curious to see how this earnings season is going to play out. Should be interesting!

  6. Posted by Humberto Malaspina on October 14, 2011 at 1:55 pm

    Traders beware, for a day traders bull profits it is OK, I wonder what will happen in the long term picture.