Thursday, September 9, 2010
Market Consolidating Recent Gains
Its a short holiday low volume week but I wanted to do a short post on this market going into Friday. We have had a great rally up in the last week and with the gap up today it was a nice time to dump longs and wait for a pull back. I think we are flagging out on the daily for a larger move up towards 1130 next week. Options expy for Sept comes next week and could be setting us up for a nice move as any remaining shorts will be forced to cover above 1106. The launching pad needs to be set first and a proper 2-3 pullback to 1080 would be nice but if we only get to 1090-1093 then watch the price action for reversals to get long.
EUR needs to hold 1.2650 in the short term but looks vulnerable there. Yen needs to weaken a bit more for risk appetite to be fully on. Copper is holding up fantastic and dips should be bought there. Oil is a bit less certain but as long as it holds 70 the market wont mind. Gold double top looks legit for short term and pull back to 1220 is likely before any major breakout. Also the bond market is pulling in nicely increasing the appetite for risk so this tells me cash will be put into stocks.
Quarter-end is coming in just a few weeks as well so do not underestimate the power of money managers chasing winners to try to eek out some gains in this crazy choppy 3rd quarter the markets have seen.
I believe you need to buy dips for now into options expy next friday and actually think the market can stay bid and grind higher into October 1.
Lots of leading momo tech stocks are holding up great in the last few days. A list of these I like on the long side is below.
Buy the dips>> AMZN, NFLX, BIDU, TSL, SWKS, CMI, APA, COP, GS, SAN, SHOO, WYNN, CXO, SPG, GMCR, FFIV, AKAM, RVBD, VMW, CRM, FCX, CLF, AGU