Smiles all around on the trading floor today and the market shrugs off the CPI and the Beige Book. The news is that earnings, at least today, don't look as bad as everyone feared.I am not sure I am buying this mood shift yet, but the way that the market is reacting today is very encouraging. The market gapped up and then held the line all day long. It is the best kind of up move in my opinion. Traders were not trying to move (or where unable to move) the market to their advantage. The buying has also been steady and not rushed (intraday S&P chart). The VIX is also down to its lowest level of 2008 after breaking through a long term trend line (chart).
The McClellan Oscillator is not screaming overbought and the current trading range indicates that we still have some upside. As a result, I have made the decision to not hedge my account today. A prudent move would be to buy some protective puts near close, however, the market is technically ready for a multi-day run.
The question, of course, is will earning results in the next 24 hours change the mood? My sense is that the leaks coming out of the financials have investors bracing for the worst, meaning to me that the upside trade is much better than the downside risk.
Tomorrow, I may kicking myself, but greed is taking over for this trader at the moment.
As a P.S., I am watching BOLT closely. It is approaching major resistance at $24.00 and failure to break out through $24 means that it may retrace. I will be taking some profits on BOLT is it doesn't break $24.00 ANSS is also moving nicely and AAPL is holding its own. I also think that GRMN is close to a bottom and I will add more once I see a bottom.
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