Wordpress Sucks & Recap
I had a great day and I wanted to highlight a setup I used to trade CSX after their earnings broke. You can call it an earnings setup per se... but I didn't actually enter until after the earnings of course.
We'll see how much longer Wordpress continues to have bugs with their image uploading system. I'm already some what dissatisfied with the fact that I can't run a lot of script type commands, including some minimal advertising. So I maybe switching over to blogger soon. I'll be sure to let you know if/when I do.
Re: The market.
Today's rally was for real. As I mentioned in my late post last night, we've begun the next leg higher and we should continue higher for the short to intermediate term as long as there are no real major shocks. Any minor shocks are buying opportunities for those of you that like to buy pullbacks.
Sure the volume today wasn't great, but if you remember the rally that took place off the lows in August didn't really have accumulation type volume either.
Money has to be put to work somewhere. Oil, as I highlighted early last week, has basically hit my primary target of $115-116 today. Who knows how high we could eventually go as the dollar continues to weaken. Anyhow, enough self promotion... and back to my point:
- sure the economy looks bad and could potentially get worse
- sure inflation is creeping up and is possibly out of control
- sure housing prices are falling and probably will continue to fall
That being said, money has to be put to work somewhere. Cash has been building on the sidelines for weeks and as inflation creeps up and the dollar continues to fall, the value of that cash decreases. If you're going to do nothing and lose $$, you might as well put some of it to work.
- With rates so low (and inflation creeping up), bonds don't exactly look like a great place to put $$
- Gold, Silver, etc need time to correct &/or consolidate their huge recent run ups
- Only so much money can be put towards shorting the dollar (especially at these levels - and no I'm not calling for a rebound or making a dollar prediction), or in other currencies
- Housing is in a depression
- In addition, money managers get paid for returns (it's also convenient that they're not managing their money, but yours)
- Oil is in a similar situation as the dollar: only so much money can be put towards the long side, especially at these levels
- Expectations for stocks have been taken down quite a bit. When WaMu can come out and report a bigger loss than expected and still move up nicely and when Intel can come out with average to slightly better than average numbers and have nearly a 10% move higher, you know people are just itching to put $$ into stocks
As a result, stocks have plenty of reasons to move higher (at least for the short to intermediate term)
*edit*
Other things to like:
- The $VIX broke its up trendline
- The IYT broke out
- The XLE Broke out & set new all time highs
- The XLB broke out & set new all time highs
- The Nasdaq/Russell lead the way, the Financials participated their fair share, and the Semis have rebounded nicely
Post a Comment