MARKET COMMENTARY (2-12-09)

Not too shabby today! The market was riding the upper range of the channel until it broke out. Half my long positions were sold out in the afternoon and I was finished for the rest of the day. I am 12% long/10% short/RIC, so I have no personal bias toward either side. I know people who are insanely long and insanely short, but at this stage, after a double-digit run-up in the market, I think it's best to get hedged, no matter what side you are on. Or, why not wait until Monday and just enjoy a 3-day weekend?


It gets tricky here as you can see in the 1 month/60-min chart. We are sitting right above the 20-day MA, only about 20 pts away from the 30-day MA, and there's a whole bunch of support and resistance all over the place. Keep in mind that it can get really choppy here. I think I'll sit this one out and take a road trip. In my opinion, we are due for a pullback and we are in a zone where it is very possible for that to happen. Also make note of the multi-month charts of the various indices approaching 'chop zones' and resistance areas. I take no chances here.

On a fundamental level, I find it hard to believe that C, JPM, WFC, and now BAC have all of a sudden become "profitable". BAC and C are stressing that they don't require anymore government capital. All of a sudden just like that? Businesses that lose money need to reach the breakeven stage before becoming profitable. All we can do is wait until they report to see if the CEOs told the truth, but I find it difficult to believe that the big boys are all making money now...just like that. Now THAT's a miracle!

Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!