Not A Question Of Merit, The Meek Gonna Get It

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Little Shop of Horrors

“Sell the mighty or buy the meek? Buy the strong and sell the weak? Only the most experienced and flexible traders should know what to do now.”

I wrote that last night, but that is not fair since even the most experienced traders-Paul Tudor Jones for instance, are baffled by recent action.

Again, with the DOW up and the Russell 2000 down, this is either a scalper’s market or one where you give yourself a lot of room and reduce position size.

One note though-the interest rates did firm Thursday making the case for the blow off top in the TLTs better. And, the Euro (FXE) has a possible island top (needs another day to confirm.) Semiconductors marginally held over the 50 DMA-again-one more day needed there as well.

If the trend towards a strengthening dollar and higher rates is beginning, expect to see even more shifting relationships. Time to think about what will benefit and what will suffer from that change.

S&P 500 (SPY) Doji day on the 10 DMA holding the 50 DMA which it needs to continue to do

Russell 2000 (IWM) Could not hold the move over the 200 DMA and now under Wednesday low, see 107 area

Dow (DIA) Made a new high by one cent and close ok-not a reversal pattern-will become one though if it breaks and closes below Thursday’s low

Nasdaq (QQQ) Can’t get through the 50 DMA and seems more attracted now to the 200 DMA

XLF (Financials) Tried the 50 DMA but couldn’t cross it on a closing basis. Under 21.70 trouble

SMH (Semiconductors) If there is any group that has a chance to show it can improve the market breadth, it’s this one-has to stay above the 50 DMA one more day

IYT (Transportation) Has some overhead, but in good shape still. This could benefit from a stronger US dollar

IBB (Biotechnology) Closed right on the 200 DMA-tomorrow’s direction is most likely good to follow

XRT (Retail) Failed the 50 DMA with a bizarre looking hammer candle

IYR (Real Estate) New highs and might be at least running out of steam-doesn’t mean that is a negative though

GLD Closed unchanged but under the major moving averages-

USO (US Oil Fund) Confirmed phase change to bullish

OIH (Oil Services) Possible topping action

XLE (Energy) Possible topping action

XOP (Oil and Gas Exploration) Gave it up today after a lot of consolidation

TBT (Ultrashort Lehman 20+ Year Treasuries) 64.00 has to clear

CORN (Corn) Subscribers: Over 35.25 should continue up