Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

S & P - A Slow Turning - Keeping The Market In Present Tense

Wednesday  30 September 2009

The short position from 1059 was covered at 1055 when the market rallied without
respite all morning. 

Today ended the 3rd Quarter and end of the month for the charts.  The Qtrly chart close was at the upper end of the bar, and the monthly close was about the upper third of its bar's close, both positive.  The trend for both is considered down, not having rallied to the halfway market from the October 2007 highs, but the net
showing is positive.

The daily chart, pictured below, has a "?" to define its trend.  Is it up, or has it
turned sideways?  A coin flip could decide the answer, and there would be no strong counter-argument to the outcome of the toss.  One thing is certain, the daily trend is not down.  The same can be said for the intra day 60 minute chart. That is decidely sideways.

For all these reasons, the position was covered, as stated at the opening.  Never
fight the tape!

There are still signs of weakness in some parts of the internal market structure, the more cogent ones described in yesterday's commentary, but they have not been sufficient to call for a turn in trend.  Until the activity is confirmed, and waiting for confirmation has been a clarion call here, the best position is no position if
negative in outlook, but certainly not short.

Good sale location provided an edge in taking a short position on Tuesday, and it
allowed ample time to let market activity develop before having to abandon it at a
modest profit.

Technical instinct is avoiding us taking a long position at current levels...too many
divergences.  As long as the support line holds, and it is on the cusp of the line at
the close, the uptrend, [neutral, at worst] has to be respected.  There have been a lot of salivating bears for the past few months wanting to be short, and those who
exercised their POV suffered losses.  Being bearish is one thing, acting too early on the sentiment is another.

The market MAY be turning, [which means maybe not, as well], but confirmation is
as absent as strong sellers.  The game plan is the same.  Market activity continues to evolve along the right hand side of the developing trading range.  Resolution always comes from that direction, and we continue to be ready to go with it.

Leaning to the bear side, from the sidelines.

S & P 30 Sep 09