Intra Day Update

By: Stock Barometer | Fri, May 6, 2011
Print Email

5/6/2011 1:04:57 PM

Here's a quick update on market action.

Wow... This market volatility is great. As discussed this morning, we've been keeping an eye on bonds and the dollar. Initially, the markets rallied. Now there's a lot for the markets to digest, as they've pulled back some of this morning's gains.

Now I'm not a big news guy, but on the 1 year anniversary of the flash crash, the markets haven't disappointed. I was at a meeting in Boston on that day. In the lobby, they had CNBC playing (I love those types of offices). I wish I was in front of a screen. However, I'm not sure what I would have done, as emotion can easily overcome good trading skills. I still think there'll be a flash up move at some point, as most are expecting a flash crash.

Second, Oil, which put in a huge hammer overnight. Basically in 4 sessions, oil wiped out 10 weeks of gains. Now normally, a move like this in oil is followed by further weakness for another week or two. However, these are not normal markets. And the news out of the Euro region is causing volatility. Remember, in oil (unlike Gold) volatility means something and is interpreted like stocks.

Regardless, talk of Greece leaving the euro zone, so they can print money and inflate their way out of their crisis, is causing the dollar to start rallying as well as bonds. So the thought is that this would be good for the Euro.

So ultimately, this could be a great buy point for oil, if the dollar reverses and bonds reverse. Something to consider. I'm playing it, but I tend to get in and out of positions very rapidly. When you trade for a living, you equate profit to weeks income. This move has the potential to make several weeks pay. So it's worth sitting in front of a screen as the sun shines outside... And when I take profits, I always pay myself first. You need to create that reward as I believe people's actions are motivated by two things. The desire for pleasure, and the need to avoid pain. Any time you can reward yourself, do it.

Back on the market, the action has me cautious. The rally in bonds has created huge potential liquidity for stocks to rally. And that would flow back into commodities. Being a Friday, I'm not sure too many people will take a big bet ahead of the weekend. I wish I had an answer for you, but sometimes these markets are very difficult to read on an intra day basis.

Point is, we remain in Sell Mode, we were looking for a potential bottom in one to 3 weeks when we issued our sell signal. We're at the one week point. The NYSE Side is more bearish than the Nasdaq (which isn't great for us). But the market is also oversold. As I always say, the key is how the markets close and where sentiment is.

We'll report on that this Monday. Have a great weekend.

Regards,

 


 

Stock Barometer

Author: Stock Barometer

www.stockbarometer.com

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend.

Our goal is to make you money. We offer you the tools and information to do so and leave it to you, the individual investor, to apply them in the best way possible.

Important Disclosure: Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2004-2014 Investment Research Group, Inc.
d/b/a www.Stockbarometer.com. All Rights Reserved.

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com

SEARCH





TRUE MONEY SUPPLY

Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/