Wednesday, January 27, 2010
GOLD MEMBERSHIP
STRADDLING THE FENCE
The market is stuck in another range after the correction that started last week and then paused the last three days. The question now is: which side of the fence will we next attempt to jump over? As you can see from the following S&P futures chart, the market is finding support at its Nov-Dec. range low and its 21 SMA from the WEEKLY chart. However, there is resistance at the same range high, which corresponds with the 50 SMA as moving average resistance. Confusing? Now you know why the market is stuck in a range. As most of you know I trade individual stocks and ETFs when the futures give me a clear idea of where we may be headed. In other words, until indecision turns into conviction there is no decision. I am sitting on the sidelines right now as I wait to see which one of two possible scenarios plays out: 1) a move back above the 50 SMA like what we saw back in Nov. 09, or 2) a bump up against the 50 SMA as resistance for another leg down. Either way, we will be ready with potential upside and potential downside plays.
UNCLE BEN
Uncle Ben is supposed to be confirmed today? But who knows. If he is we may indeed see a nice move up in the market as a little uncertainty will be removed. Remember, Mr. Market does not like uncertainty. Whatever happens it is obvious that there is dissent and disagreement over Uncle Ben’s performance. Bottom Line: His wings have been clipped a little. I would not wish to be in his shoes for all the money in the world.
APPLE IPAD LAUNCH
Well. It is officially official. Apple has an IPAD. Interestingly, the stock has been a day trader’s dream the last few days with huge moves from one side of neutral to the other. AAPL is a great company and as the news is absorbed I am sure we will have another trade develop one way or another. Although we may think this new product should drive the stock higher and higher, keep in mind that the logic of the market is oftentimes much different than our own. The news will not drive the next trade: the reaction to the news will. And those reacting to the news… Traders.
