Thursday, July 10, 2008

07.10.08 - GSE Insolvency?


Thanks Will Poole. Financials are hurting badly (XLF -1.15%) -- but not quite as much as Consumer Discretionary (XLY -2.33%) on retail same store results. Probably fool hardy to draw support lines across two years of data (OK, many would say across any time frame), but here it is... SPY $123 anyone? (Edit: The $122.50 to $123 range from the 2006 lows) would likely cause reason for pause, at the very least. We are about a buck above the line this morning. Yesterday makes 23 closes below the SPY's 10-day Moving Average.

9:45PST UPDATE: Carving a Bottom?

Looks like we are seeing some accumulation here though I don't like that lower-low. Price is above the VWAP and the TRIN is settling down; keep an eye on that as XLF is still struggling to break even and ugly rumours abound. In this environment we need to see a series of days like this, not one day collapsible wonders (edit: unless they are really strong -- see Hanna). I have updated my posting time setting to Pacific Standard Time (previously Central, though I've been here for about a month).



11:00AM PST UPDATE: Did you anticipate resistance at the Pivot/ Five-Day Moving Average? It would be fine with me to close just around this level, maybe just above the 5-day if we can manage? Then a few accumulation days to allow that line to flatten and head gradually up. Not a predication, what I would "like" to see.

11:25AM PST UPDATE: OIL IS EXPLODING (+4.6%) -- WHY?! CNBC STINKS! IRAN? MARKET DROPS 100 POINTS IN FIFTEEN MINUTES AND THEY DON'T EVEN MENTION IT. YOU HAVE GOT TO BE KIDDING ME. -- NOW THEY ARE TALKING ABOUT A TECHNICAL BUY... WHATEVER, BUT SO MUCH FOR WHAT I'D "LIKE" TO SEE. BOT SOME 'DUG'.


12:20PM PST UPDATE: OK, I've calmed down. Pretty good recovery -- 'hopefully' it holds. The DUG, inverse oil and gas exit target is set close. Something about Nigeria, after all. Reader John W. points out a couple indications of bull frustration nicely posted by Bespoke:

o Frustrations
o Running of Bears

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