9:15am
Americans love to fight. All real Americans love the sting of battle.
-George S. Patton
Good morning readers. Today the battle continues as we watch and see if this bounce can really turn the corner into a true rally or if it will fizzle out like the trend has said it will. The bulls can’t seem to surpass the resistance around 1100 – 1105 in the S&P 500 but if we do surpass it with strength and close above it, this trend could be changing. While I’d have missed some of the gains by not calling a bottom, I’d also have missed out on numerous inaccurate bottom calls that took place during this bearish run. Protecting my capital in a bearish market is essential to my overall strategy. I’d rather run short term trades in the meantime and not overly invest a significant amount of capital until we see more clarity. CNBC loves to put pundits on TV saying the bear market is over, I pay them no heed. With all that being said, I still don’t believe this bearish trend is over just yet but I’m looking to be wrong on that in the near future. I’m sure many of you are hoping for the same.
The dollar is slightly up this morning and commodities are as well even though the relationship has typically been strong dollar equals pressured commodities. I anticipated gold to take a hit but instead it’s making me look foolish and showing some strength. IMF announced they are selling a significant portion of their holdings so I anticipated gold to continue to be pressured due to that and the dollar showing strength.
We’ve been on a bounce for over a week now but the bulls can’t seem to turn that corner and follow up the bounce with true strength. The volume isn’t significant which would be a strong indicator if the market rallied on above average volume. However, last year, the bears rarely won as the bulls would rally on low volume. I believe that is still in the back of the minds of the bears even though this time is proven different than last year.
I continually watch the Shanghai Exchange overnight and they’ve bounced a bit which helps out the bulls. Tech has also shed its hated label as of late so it is helping lead. On the other hand, we need more leadership to help the bulls and I’m a firm believer that any true bull rally will need the financials to help sustain it. Time will tell what happens but again, I’m not buying into this bull rally for now. As I’m writing this, I watched the S&P 500 jump over 1100 only to get smacked back under it while the Dow was up 40 and now up 10. We’ll see if the bears gain traction or if the bulls keep grinding out gains. The battle continues today and in turn, I’m going to still play smaller cap stocks which have flown under the radar of the general market.
I’ll be back and forth today as I have other business to tend to but I’ll be putting in some small limit orders and see if any hit while I’m gone. Enjoy the battle today, it may be an exciting one. Thanks for reading Kudrna’s Stock Market Blog and be sure to digg this, tweet this, and link it to any forums you are apart of. Good luck out there.
Mike
No positions mentioned
