More chop in the market today. Although the 3 major indexes look OK for now, holding up above their 50-Day MA’s, the Russell made a strong close below it today after recently forming a double top.

It seems that the Russell could be a harbinger of what’s to come in the other indexes.

If the S&P 500 confirms the move in the Russell, then we will likely see more downside for weeks, maybe months.

There were some strong moves in stocks from the Watchlist. LIFE and SVA gapped up, and TXT put on a good show. I avoided the gap ups, which never really gained much strength after pulling back. I do like SVA though if the market can find some support.

QTM triggered, and made a nice move. I didnt take this one either, but wished I had. I didn’t know they reported earnings after hours today. It was up huge after hours.

I know of at least one stock that is working, a trigger from last week, JADE. Wish I still owned it.

So why did I avoid buying today? The answer is in UUP, the dollar ETF. As you can see in this 5 minute chart of UUP, there was nothing bearish about the dollar today. There was some weakness late in the afternoon, but it rebounded into the close. This of course meant the market was under pressure for most of the day.

To show just how closely the UUP correlates with the market, here’s today’s 5 minute chart of the S&P 500, upside down.

So as long as the intraday chart of UUP looks bullish, buying stocks may not be a good idea. That’s the indicator I’m using.

I mentioned in Sunday’s post that real estate and casinos are forming symmetrical triangles, and could go either way, with the casinos looking to WYNN on Tuesday. Well, that was today. WYNN reported terrible earnings and the casinos broke down. Commence shorting the casinos.

Although there are still some bullish looking charts out there, breakouts are failing, just like they did in late 2008. But now the market is very oversold, and could make a big bounce. For now, I am sitting on the sidelines. I don’t want to do anything stupid. Just keeping some cash and ideas ready for a bounce.

Trade Ideas for 10/28/09:

I’m not adding entries to the Watchlist, just posting the charts.




Good luck and good trading!