This weekend I spoke to several different types of people in different walks of life who are all confused and frustrated. Friday I was at a rooftop party with a number of traders who got caught short going into Friday after seeing the weakness in the banks along with a bit of an air pocket on Thursday in some high beta tech leaders. These traders definitely got their a** handed to them during Friday’s move. On the other hand you had early bulls like me that bought all these big movers very early and took off most of the size way too soon. While I might be kicking myself for leaving profits on the table, this is certainly better than being caught short into Friday’s powerfully move.
On Saturday night, I had another event with some friends from college that for the most part do not work on Wall Street. They are not feeling so comfortable in their jobs, and some of them are still unemployed. Most bought houses in last five to eight years as they have young children. These guys are all down around 20% + on their residence. Most of them were all talking politics and arguing about who got us here. On Sunday, I ran a half marathon with the American Cancer Society. None of these people were talking the economy or stock market but instead about how running is helping them to deal with Cancer. They are worried about health care costs and how the new health care legislation will affect them. It is very easy to get caught up in all the talk and negativity. Unfortunately, there are many unknowns in this world right now and most are out of our control. It is important to understand that it is all relative. The moral of the story today is, stay focused and positive for your family and small steps will add up to more solid ground.
Back to the markets… At this point it’s very easy to lose your cool and get stubborn. You can only keep it small at these levels with quarter’s end Thursday and bigger resistance coming in front of us. S&P turned up hard and closed around 1148. Next resistance is 1152 then a bigger is at 1158-1162, then finally major resistance is at 1172. Support is 1138-1142 then major at 1130
HIGH BETA TECH
AAPL AMZN BIDU NFLX are the strongest tech stocks in the market right now. Each one is up a ton from the right buy price, or even the momentum buy price. For today, use Friday’s high as pivot. They are all very extended but have shown no “signs of a slowdown” We probably see some type of reversal mid week here or sooner.
VMW FFIV CRM GOOG all act very well but not like the above.
Banks are lagging big time and had first up day. I would look to see if they drag against market or play a little catch up.
Gold should get over 1300 this week.
Last Monday there were a ton of set-ups and I was SUPER excited. Today I am looking for small trades.
