The S&P 500 logged its worst January ever last month, finishing down –8.8%. So much for the January Effect. Many traders use January as an indicator for the rest of the year, which doesn’t bode well for the rest of 2009.
The indexs are now sitting at the bottom of a symmetrical triangle, as seen in this chart of the Dow.
The market could bounce from here. A move lower though will almost surely mean much lower prices in the near future.
There as one trigger from the Watchlist on Thursday, but its breakout was on low volume. It was HMSY, and on Friday, it showed why low volume breakouts are risky to hold.
The IBD rally, which was confirmed on Tuesday, is already under pressure. It logged a Distribution Day on Friday. A Distribution Day so soon is another ominous sign. Nonetheless, IBD has one stock blackboxed in the Monday Edition of Investors Business Daily. It is GILD
I am still only looking at day trades, or possibly holding for a day or two if the stock looks promising, and stops and targets have not been hit. Taking profits between 1-4% may not seem like much, but it adds up quickly, and in this market, I will gladly take it.
Good luck and good trading!
RSS feed for comments on this post · TrackBack URI
Leave a reply