Last Friday, we cashed out on our gains after the strong open. I said in the Trading Room:
June 5, 2009 7:20 AM
I'm calling a long weekend. will sleep in on Monday! :-)
This morning, the market opened down. But, it climbed back up in the afternoon and turned green before closing flat. A lot of shorts jumped on the market in the morning and had to cover in the afternoon. This is why I thought I could just sleep in today.
This morning, Briefing.com issued an market update that said:
briefing.com
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WRAPX Market Update: Participants Push Against Stocks.
The major equity averages have been under pressure since the opening bell (Dow -1.1%, Nasdaq -1.3%, S&P 500 -1.1%). Though there hasn't been any particular headline to drive the selling effort, many participants are paring their positions after stocks failed to hold their gains in the wake of what was actually a much better-than-expected jobs report last Friday... The failure to move higher on relatively encouraging data has led some to question whether positive economic news is already being priced into stocks... Amid such concern, participants are making a concerted, broad-based push against stocks, which has nine of the 10 major sectors in the red... Financials are the only sector to trade with a gain. They are currently up 0.4%... Strength in financials comes as bank stocks move higher ahead of the Fed's announcement regarding which companies will be allowed to repay TARP funds... There is no economic data due today, and corporate headlines are lacking.
This update pretty much mentioned what I discussed in my Market Forecast and Sector Watch on Sunday evening. So, I commented in the Trading Room:
June 8, 2009 11:02 AM
briefing.com saying some of the things that I said last night in my Market Forecast again! [...] although, I think they should change the wording to participants lock in some profits, instead of push against stocks.
this way, they wouldn't have to write another update if the market gets a late rally and the market turns green.
And, what happened in the afternoon? Yep, the market came back up into the green and Briefing.com gave another update that said:
briefing.com
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TALKX Floor Talk: Final hour squeeze takes averages back into positive territory
A late-day, high-volume squeeze has taken the major averages into positive territory, with the Dow gaining ~120 pts in the past 40 minutes (Dow is now +35, SPX +3, Nasdaq Comp +2). There doesn't appear to be any fundamental catalyst for the move. The momentum picked up quickly as the averages broke above their mid-day ranges and has continued to build as the market trades back toward the recent multi-month highs into the final half hour of trading. With the market giving recent signals of potentially topping out, Shorts have become more aggressive. However, the market-on-close imbalances continue to come in weighed to the buy-side, leaving Shorts scrambling again into the close.
Funny, isn't it? Briefing.com is very quick with their information and is one of the fastest sources in get the news out to readers. But, very often, the market actions were already written in the charts before the actual events take place. People who are "in the know" will take actions before the news come out. The actions from the "smart money" can often be seen from the charts. So, learning to read the charts carefully and well can often help a trader to deciphor the seemingly chaotic market actions/reactions.
Many momentum stocks came back up after being solidly down in the morning. GOLD went below $68 and closed above $70, up $2.31 for the day. BIDU slumped to $292.52 before closing almost flat, at $303.9. FSLR almost broke down in the morning when it dropped below $175; it came back to close at almost $184! ICE slashed down to $111.5 and closed at above $118.
The Dow was up +1.36 points; SPX slipped 0.95 points; Nasdaq slid 7.02 points:
Most sectors hung around the neutral line. Techs and miners were weak, as mentioned in my Market Forecast. INX2 (internet) dropped almost 2% and XME (metals and minint) lost 1.81%. USO (oil) closed in the green again. XLF (financials) added +0.73% (also, discussed in my Sector Watch). FXI (Chinese ADRs) fell 1.26%.
The market indices are not showing much new info in the charts tonight. We'll look at them another day. VIX went up to almost 32 today, but, came down to close below 30 once again. SKF (financial ultrashort ETF) tried hard to stay above $40, but, closed just below. The market is still sorting things out. On one hand, there are people locking in profits and eager shorts pressuring the market; on the other hand, there is new money that are still coming in on pullbacks.
In the news...
BLK closed +3.43% higher, or up $5.62, on BGI talks with Barclay in a $12-$13 billion deal. We initiated a trade in BLK today. DECK announced a $50 million stock repurchase program and traded +2.31% higher. AAPL unveiled a new iPhone that sells for only $99! AAPL slipped to below $140 in the morning and came back to close near $144.
Good night and HappyTrading! ™
