Wednesday, August 26, 2009

Summertime Blues

At midweek the SPX is pretty much flatlined and it has been pretty choppy so far this week. The market has actually held in there rather well imo considering oil has sold off 4 dollars and the dollar is stronger the last few days. Whether or not this dollar rally is something to be continued remains to be seen but for now it looks like it may continue grinding up. It is late August and volume is drying up so the path of least resistance is still higher. Although alot of people keep talking about how toppy this market "feels" and that a correction is coming; it hasn't. Yet.

I do believe we are within weeks of a major market move that will guide us in a trend into the fall. I tend to stick with the upside bias as I said Sunday that I see us getting to 1111 SPX in one final blowoff top type of movement, and it could very well happen quicker than you think. Funds continue to chase strength and buy weakness. You can see it in the trashy financial's lately. AIG, C, FNM, FRE are seeing the kind of action that you tend to see towards the end of large moves. But I'm not about to try and predict where the moves end.

Let's try and see if we can get 3 solid down days in a row or a down week that closes below the lows of the prior two weeks before we start to look at shorting too much. You will get burned otherwise. I would continue to sell put spreads in strong stocks and collect some premiums. Trade safe.

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