Stock Market Update: Bulls In Control…

Posted by admin

November 12, 2009

After the follow-through day on Monday, the market seems to be digesting those big gains from last week by resting here as volume decreases. The follow-through day marks the end of downtrend and confirms the market in uptrend. This doesn’t mean that you go out and start buying stocks randomly. It’s just an indicator that its ok to test the water on the upside with small buys and if that works, you add to it. For more on follow-through day, read “How to make money in Stocks” by William O’Neil (one of my favorite book). The only sore in the eye on the daily charts of the indexes is the ever decreasing volume. I have a feeling that as we move higher and higher, fewer and fewer stocks are going to participate in this uptrend.

If you have been following the financial news lately, you might have come across the strong correlation between the US dollar and S&P 500 or the overall market. It seems like as the dollar keeps making new lows, the market is making new highs. I don’t know how long or how far that goes but its wise to keep dollar index on your radar for the next move.

Index	Close	Change	% Change	Trend
Dow Jones	10291.26	+44.29	+0.43%	UP
S&P 500	1098.51	+5.50	+0.50%	UP
Nasdaq	2166.90	+15.82	+0.74%	UP

On a trading note, I was stopped out of my Research In Motion (RIMM) short for a small loss. It looks like it undercut my stop-loss and doesn’t seem to be getting up there again. I will keep a close eye on RIMM for short again as the market moves higher. Goldman Sachs (GS) seems to be forming its right side of the head and shoulder pattern. It needs to be seen how it acts near the 50 DMA. Other shorts to keep on you radar are Potash (POT), First Solar (FSLR), Sohu (SOHU) and Shanda (SNDA).

Other than the shorts, there are some potential longs I’m keep on my watchlist are, Given Imaging (GIVN), Solera Holdings (SLH), Salesforce.com (CRM), Verisk (VRSK), Oplink Communications (OPLK), Arcsight (ARST) and Bucyrus (BUCY)

Trading Addicts.