Today's actions surprised me. Again the market looks resilient. This was observed last week as well as many stocks hold steady after the plunge in May'08. Look around, and you will notice alot of stocks are still not trading below the March's low. I too am tempted to go long to take advantage of this rebound. However i choose to do otherwise. With my trendlines and indicators in place, i realise this may not be the best time to go long as yet. No doubt we are near support levels, but experience tells me, there is a time to fish near support, there is also a time even support can breaks easily. The trading principle behind this is, in a bull market, support levels will hold and resistance levels will crack. The opposite is true for the bear market. I paused.... closed my eyes as i sit comfortably with soft music playing in the background in my war room... what do we observe in the market? Resistance are holding and support level has cracked. Some stocks got resisted at 200-day MA as well. With this evidence being so obvious, it's no wonder i feel uncomfortable going long. Commodities is the only sector that is rightly going against the bear tide. Due to it's volatility, i opted to give it a miss despite seeing the sector moved. 80% of the stocks are in trouble and i reckoned my odds are better if i can identify the sector in trouble and go short on it. Currently there are not many trending stocks in the market. Infact, any trendtrading strategy would probably not work in the current market condition. Short-term trading and chart formations and basic support and resistance will work very well in the current market. One of the reasons for not going long on commodity stocks is due to the volatile oil. Hearsay Saudi and the rest of the world are trying to bring down the oil price. Hence i won't be surprise if they are in favour today and then fall flat next day.
STI currently swee swee nice nice sitting on the trendline support with today's closing. MFI is also pretty close to a rebound. For tonight, i will be using my volume rule to screen the market to pick up any stocks with unusual volume. The reason i like this XPertTrader rule is because this simple scan allows me to understand what is going on in the stock market. From the results, i will be able to sniff out any unnoticed opportunities.
Anyway, currently i am still trying to decipher what the market anticipates of Ben's actions. Cutting rate is out of the question. The answer i would like to know is how market will react to a rate increase or hold steady the rate. Dow,
Let us also not forget this is the last week of June and we may expect to see window dressing in some index stocks.
DISCLAIMER: This is not an inducement to buy or sell. You should do your own analysis on top of my postings.
