Well the plan I laid out last night worked pretty well today. I said I was going to focus on the S&P 500 but I ended up shorting the QQQQ instead. Like I said yesterday, I wanted to wait until after Geithner started speaking at 11 AM before I did anything. Luckily the indices traded in a tight range between 10:30 and 11:00 which gave me a narrow candle to execute against. I jumped in QQQQ at 11:04:55 at $31.17 with a stop at $31.37. The bottom fell out within minutes and I just covered at the end of the day for just under a 4R gain.
It seems to me that today’s selling was more than just “sell the news” but actually a bit of disappointment with the lack of specifics in the plan. Volume on the S&P 500 was the highest since November but the index is still above recent support. So as usual in this market we’re stuck waiting for some follow-through.
The Nasdaq fell back below its 50-day moving average on a volume spike.
There was a lot of damage in the financial stocks again. XLF was dragged down 10% thanks to moves like the 19% drop in BAC. This sector continues to teeter on the edge of the abyss.
lots of downgrades today
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Down | Down | Down |
| Intermediate | Lat(-) | Down(-) | Down(-) |
| Short-term | Lat(-) | Down(-) | Down(-) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
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