Archive for April, 2010|Monthly archive page

Not In Biz Of Calling Tops

Thursday’s rally tests our bearish bias.

The S&P 500’s volume was lighter than yesterday’s, giving us indication that Bulls may have less steam.

But an Accumulation Day of higher volume on the Nasdaq boosts the chances of new highs.

We’re not so much in the business of calling tops in the market as we are recognizing markets that are friendly to our strategy.

Heavy selling of late has been a caution to initiating new buys.

We’ve gone as far as adding shorts – though have set tight stops so as not to jeopardize our accounts.

We’ll be ready when the next hands are dealt.

True Trend

Fed’s decision to hold rate target is no surprise.

Market’s reaction appears happy.

Though true trends following Fed announcements often don’t become clear until the day following announcement.

We’re still a Bear!

Sell Bias Stronger

And yet another solid Red Flag to the Bulls’ charge as Tuesday’s heavy selling saw the major indexes to closes below their 20-day moving averages.

We’ve been Bears for weeks and weeks. While the market can certainly remain irrational longer than we can remain solvent, we’ve taken the discipline to cut losses from shorting before they got out of hand.

But today’s price action simply turns our Sell Bias even stronger. We’re looking to add shorts – again.

Nervous Bears

From the Bear’s perspective the market just won’t give in an inch.

For the Bulls, every inch higher is just another justification.

But as volume counts continue to suggest institutions are unloading we’re sticking to our Sell bias.

We may very well see more highs in the coming sessions, but that doesn’t mean we’re buying them.

When the market’s ready to rollover we’ll be here.

Staying The Course

We’re still Bearish despite Monday’s late rally.

Smart money tends to close sessions – true.

But the dominance of sellers in this market as evidenced by several Distribution days over the past few weeks weighs heavier.

Our short positions have remained in play.

We stay the course unless given reason to trade otherwise.

Staying The Sell Course

Our bearish bias is strengthened by another round of Distribution Wednesday.

Anytime institutional grade selling enters the market we tighten the reigns and look to cover long positions, if not go short.

While we’ve been bearish for weeks we’ve been tested as the market inches higher.

Calling an exact top is not something we set out to do. Rather, we take a temperature of the market and decide how friendly it is for our positions.

Sooner or later these selling signs are going to be followed through on by price drops, or washed out to make way for higher prices.

As for now we’re staying our Sell Bias course…

Bam, New High!

The S&P crept to another new high, keeping us reminded that Bulls don’t keel over that easily.

Where the dominant volume trend remains Bearish with four days of Distribution logged in over the past three weeks, we’ve yet to see any real price follow through.

Tomorrow’s Employment Report is just the type of thing to trigger a market pivot.

But as always, we will trade what is and not what should be.