Friday, February 29, 2008

02.29.08 - Crosscurrents


Lots of cross currents on a day like today, but you don't need me to tell you the've all ended up contributing to the downside. As of now, there is strong resistance at the VWAP and the 5-day MA has turned over. From a pure technical perspective, we looked vulnerable yesterday, but I thought with the end of month perhaps we'd be saved for a day or two. No such luck on this Leap Day Friday!

Unless we can see a meaningful turnaround in the cumulative Tick, I'd be inclined to stay away from adding further exposure. By the same token, I'm not bailing on what I've got. I may change my mind if daily volume ends up being particularly light today, which together with the big down move can be a harbringer of further weakness ahead. If I have time I'll post some stats on this trade.

2:OOPM CST UPDATE: It doesn't take a "leap" of the imagination to know the bulls would have rather skipped the day. Apparently Muni-Bonds are being liquidated by several hedge funds to meet margin at levels several times or more the average daily volume. Art Cashin of CNBC says if it were early in the week, we would be down 500 Dow points. Selling is happening across the board including energy for the first time in a while. The Vix is now at 26.07. I'd be long if it were tradable. This is really (generally) the same as saying there could be further price pressure in the week to come.

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