The market continues to provide opportunities for both bulls and bears. Last week was a perfect example of that. If one's timing was right, he could have made money playing both sides. Of course, the opposite is also true! Despite all the mixed messages the market is sending, I remain bullish in the intermediate & longer term. The market needs to pull back a bit more before I become a buyer though. I'd love to see the S&P 500 re-test its 200 DMA. Then I'd really start looking for some long candidates. That's my 'perfect world' scenario, but I know things won't play out so simply.
As for individual stocks, I see very little that I want to take a position in, long or short. I am watching a list of stocks which have been strong recently. I'd like to see many of those stocks drop back to their middle Bollinger Band, where I'd become an interested buyer. So I'll be playing it light to start the week, with just my two short positions. I'll continue to look for earnings movers for short-term (intraday trades).
Here's a daily chart of the NASDAQ. It shows 3 potential areas of support. I'm not expecting the first level to hold (that would be too easy!). The 2nd and 3rd are where I'd like to step in and start buying.
Now for the S&P 500's weekly chart. The first thing that strikes me is that it's gone nowhere for the last 9 months. The index is down 0.8% siince July 17, 2002. Not an exciting chart! I'd be much more bullish on the S&P if it could get above the 950 area.
The weekly charts of the NASDAQ and the Dow paint the same picture as the S&P 500. The bulls have a lot of work to do in order to get those weekly charts trending higher. I'll have to remind myself to keep chaecking the weekly charts to keep my bullishness in check. It's still a "stick & move" market.
