Mike
12-05-2011, 08:23 AM
Friday’s action looked a little like stalling but didn’t quite meet the volume criterion.; we did meet stalling criteria on the NYSE Composite however. Still the current wedging action (moving up on declining volume) is less than positive. Friday’s action could be okay in the context of the prior big move up however and I note the possible support floor based on the confluence of pivots in Billy's email.
This morning the futures are pointing upward, the S&P500 is knocking at the 200-day moving average line again. This is where the battle line is drawn; we will break one way or the other.
I have seen positive action on M (Macy’s), GOOG (pretty ugly base though), DLTR, PNRA, PM, HD, CXO, INT, FL, TCBI, MA, V, SWI, ULTA, CVLT, UA, SBNY
If we see a follow-through day in the coming days the exposure count would be +3 for the B1 FTD buy signal as well as another +1 for the prior B3 (lows above the 21-day moving average) and +1 for the B6 (lows above the 50-day moving average) that we have already had since the lows. +3 represents 75% invested however there is a restraint rule that limits the exposure count to +2 (55%) until the index closes at least 1.25% above the FTD close.
I was dealt a dilemma two weeks ago when the market fell into correction mode. I had owned SWI and I was up 20% in less than 3 weeks. This normally triggers a hold for at least 8 weeks. I could have held but I chose to sell.
Because of some of the positive stock action, last week I considered taking an early entry in ISRG, a pocket pivot buy point. Then I looked at the battle line drawn at the 200-day and remembered how the current situation looks like many of the prior bear markets at the exact point the markets turned downward and decided now is not the time to take a risk like that. I remain 100% cash and await the market’s decision. I note that bear market rallies are at the outset supposed to look very convincing in order to extract the most pain.
This morning the futures are pointing upward, the S&P500 is knocking at the 200-day moving average line again. This is where the battle line is drawn; we will break one way or the other.
I have seen positive action on M (Macy’s), GOOG (pretty ugly base though), DLTR, PNRA, PM, HD, CXO, INT, FL, TCBI, MA, V, SWI, ULTA, CVLT, UA, SBNY
If we see a follow-through day in the coming days the exposure count would be +3 for the B1 FTD buy signal as well as another +1 for the prior B3 (lows above the 21-day moving average) and +1 for the B6 (lows above the 50-day moving average) that we have already had since the lows. +3 represents 75% invested however there is a restraint rule that limits the exposure count to +2 (55%) until the index closes at least 1.25% above the FTD close.
I was dealt a dilemma two weeks ago when the market fell into correction mode. I had owned SWI and I was up 20% in less than 3 weeks. This normally triggers a hold for at least 8 weeks. I could have held but I chose to sell.
Because of some of the positive stock action, last week I considered taking an early entry in ISRG, a pocket pivot buy point. Then I looked at the battle line drawn at the 200-day and remembered how the current situation looks like many of the prior bear markets at the exact point the markets turned downward and decided now is not the time to take a risk like that. I remain 100% cash and await the market’s decision. I note that bear market rallies are at the outset supposed to look very convincing in order to extract the most pain.