Those who have been day trading the index futures know today gave many traders whiplash as stocks bounced around for much of the day’s trading session. Intial jobless claims helped the market at the open, but troubling news from the housing put the brakes on and sent stocks lower. For much of the day stocks simply bounced around in lackluster trade. Stocks found it difficult to sustain a movement in either direction showing the epic battle between the Bulls and Bears. It wasn’t until 2pm EST when the Bulls began to win the struggle and pushed the major indexes higher. Crude Oil prices closed above $65 a barrel helping oil related names push higher into the close. Closing in their upper ranges along with higher volume notched a day of accumulation for the market.

On the downside our IBD indexes lagged the …

Stocks were hit hard from the onset, even leaders found themselves being sold. Ben Bernanke was testifying on the hill while traders were dumping stocks. Selling accelerated as the day wore on but were able to find footing prior to lunch time. Stocks then were hit hard after 2pm hitting new lows but support was able to come in. Stocks once again were able to avoid a nasty distribution day if the NASDAQ had gone out on its lows. This market is once again proving there is an underlying bid to the market.

Two key levels were held today and an important moving average. The NASDAQ was able to hold 1750 which happens to be its 200 day moving average while the S&P500 was able to hold a psychological level of 900. Holding the 200dma is very important level for the …

Last month I wrote an article titled Bears Vs Bulls: High Short Interest Stocks. These are stocks that have a positive 52 week gain and short interest between 30-60%. Let’s take a look and see if they performed the way we thought they would. Priceline.com (PCLN) Stockmasters recommendation: Short The Masters were all over this one. Priceline has fallen from $125.69 to $109.55 in the last month – the dark side of the force has taken over, and the 60% short interest in the stock is winning the battle. ...

Was a positive ISM report the spark bulls needed to seize the tape and put a short-squeeze on? It wouldn’t take much with markets much oversold. But, higher prices paid are hurting manufacturers in this inflationary environment and passing these costs to customers is becoming increasingly difficult. Meanwhile inventories are growing and new orders are slowing. This is a pretty thin reed for a rally. Inside the numbers the troubles plaguing investors and the economy are still omnipresent with commodity prices rising, transports tumbling and emerging markets faltering. Volume was very heavy but breadth wasn’t impressive. [With columns, please eyeball the math. Poor Yahoo just can’t do it. We’ve had good suggestions and many folks and agents “trying” to contact them to fix it. Do they care??? The answer seems, obviously not.]

It is always amusing to see the end of the day gain or loss in the indexes, and how it sometimes hides the wild action of the day. Today was one of those days - we gapped down (bearish), rallied from what appeared to be a test of support (bullish), gave that all up and tested new lows - 1260 (bearish), and then reversed and rallied to the highs of the day (bullish). For all that action and headache, it just took us back to right near where we closed yesterday. But it scared and/or emboldened traders multiple times, in completely different directions. Absolutely nuts - as they say in bear markets neither bulls nor bears have an easy time making money (the strongest rallies are usually contained within bear markets, but they are sudden and out of the blue).Here is a ...

Before each of my market posts there is a buy/sell call (at owner's risk!). At the start of the month I usually try to call the flavour for the coming month based on overall market conditions; which I have marked on the chart below. What is clear is having waited so long for the market to roll over (basically spent most of 2007 waiting), I jumped too early on the bullish bandwagon this year. The past 3-months have been good for bulls. Like in late 2006 there is a reasonable chance June will be another upward month. However, it is unusual to get sequence runs beyond 4 months. Look at the early 2006 decline, late 2006 advance, early 2007 advance and the late 2007/early 08 decline; all lasted around 4 months. What we are likely to see after June is a period of sideways ...

Some people are making this way harder than it is when it comes to making money. I make it very clear when I am going very long and when I am only buying a few to a hundred shares of something. A newbie will not know this but anyone with at least a few months will know that. So when you see that there are so many longs tonight don’t get too excited thinking that this market is going to be super bullish. It is what it is. A low volume rally. But this low volume rally is loaded with short sellers, via the NYSE short interest constantly hitting all-time highs now at 14.27. So as long as the short sellers jump in the market and people continue to deny the rally–bulls fell to 37% from 50% in this week’s investors intelligence poll. I have heard some actually say “I thought we ...

MARKET COMMENT May 6, 2008 Do not pay any attention to bad news. That’s the message today. Bulls ignored record oil prices and crummy news [a dividend cut and wider loss] from FNM. Instead they chose to believe that FNM’s position going forward was strong and they would “feast on” market chaos from new products and, of course, the worst conditions were behind them.

How will the market react to whatever the Fed decides to do? Because of the tight trading for the past few days the expectation will be for a sizable move one way or the other. The 200-day MAs are a logical upside target, with the 20-day and 50-day MAs lurking below.

Markets have effectively traded sideways since the January bottom and it would be good for this pattern to be put to rest. The best action for the bulls comes from the Transport index (even with all the woes in the airlines). The ADX confirms a bull trend and the “Golden Cross” between the 200-day and 50-day MAs shows a long-term bullish shift. Given this, I suspect we will see higher prices over the coming weeks even if the Fed ‘disappoints’.

Points [1] and [2] on the chart mark …

April 28, 2008

This was a pretty slow day and investors are going to mark time, absent other market moving news, until the Fed makes its next decision. The volume today was ultra-light.

Let’s face it; bulls have seized the tape with “the worst is behind us” line regarding financials and the credit crisis. From the WSJ was this quote attributed to T. Rowe Price portfolio manager Daniel Shackelford, “We established that the Fed was going to backstop the markets, keep things stable and slowly but surely nurse the markets back to health…risk-taking has come back in the market.” So, that’s the bullish spin.

And, things do look better, but hold on a second. Below is a …