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Joshua "MauiTrader" Hayes is CEO, President and founder of Big Wave Trading Inc., a Maui, Hawaii-based stock market advisory service. Hayes is a well-respected stock trader who combines fundamentals, technicals, psychology and money management to trade professionally for his personal,... More
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  • The Dow and NASDAQ Log 7th Straight Day of Gains as Volume Delcines 0 comments
    Jul 14, 2010 10:41 PM | about stocks: AAPL, GOOG, YHOO, INTC, GS, MSFT, IBM, C, CSCO, SHLD, CMG, POT, GLD, NEM, BIDU, ISRG, DELL, PG, EBAY, PCLN, MMM, QQQ, SPY, PCP, GMCR, DIA, TBT, DGP, EWY, VXX, IAG, EGO, UGL, CRYFQ, DDC, OVTI, AVGO, BP, CTRP, SBUX, CRM

    Intel set the stage blowing out earnings as technology stocks opened higher at the open.  It wouldn’t be long before the NASDAQ would challenge its 50 and 200 day moving average.  The market had seemingly put behind any double dip fears and focused on the earnings.  As the market moved higher into its moving averages they began to run into resistance.  Traders seemingly put down their focus of earnings and looked ahead to the Federal Reserve meeting minutes.  Leading up to the release the market pulled back, but continued their downward track.  Just as the market appeared to fall off a cliff, the market found itself finding support and began to move higher.  Volume was running near flat as the market sold off, but on the rebound it began to peel off yesterday’s level.  At the end of the day, the market closed near their open and the NASDAQ and Dow capped off a 7 straight day of gains.

     

    The market in the near-term is overbought, but this doesn’t mean we have to revert back to the lows.  It is possible we move lower here, but until we see a breakdown in price the market is simply resting.  The doji candles you see simply show an indecision by the market as it weighs earnings against a possible slow down.  Sentiment is quite negative as the most recent Investors Intelligence survey shows the lowest amount of Bulls since April of 2009.  Interestingly enough Bears didn’t rise as Bulls fell, but Bears do outnumber Bulls now.  Many will look to this as a sign this downtrend is over.  One thing to be careful about is that there isn’t a perfect “indicator” or “holy grail” in this market.  Anything is possible so rather than speculate on a possible move.

    A negative reversal here would surely spur further selling, but do not try to anticipate a move.  Wait for price confirmation and then move with your conviction.  Simply anticipating will have you churning your account.

    The market will now be turning its attention to JP Morgan and Google tomorrow.  JP Morgan will report earnings before the opening bell, options activity surrounded between 40 and 42.  The way both stocks have traded over the last few weeks suggests traders are quite optimistic about the earnings prospect.  However, like Intel, Alcoa, and C S X the earnings pop may be short-lived as great earnings reports have been sold.  This is why trying to get in front of earnings usually leads to many unprofitable trades!

    Today was a mixed day, it would have been better if we had pulled back in light trade rather than bounce around finish near the open with volume running lower.  However, a strong move tomorrow with volume would certainly put this pause day to rest.

    The positives continue to build in this market whether or not this sets off a big trend from here will be answered shortly.  Be prepared

    Remember, we are running a discount for our Platinum, Gold, and Silver memberships…if we roll over or blast higher are you ready to take advantage of it?  Here is the coupon code:  A5AE5.


    Disclosure: No Positions
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