Tuesday, December 2, 2008

12.02.08 - Recovery Day

Today looks nearly as upwardly lopsided as yesterday did to the downside. Take a look at $UVOL today compared to yesterday's $DVOL (bottom pane). However, Daily Cumulative Tick is flattening and I believe we may see some resistance as we approach the five-day moving average at ruffly SPY $85.75 (still a dollar above current levels), if not sooner.

Undoubtedly much of this recovery has been short covering off of yesterday's move. That overnight long certainly worked out well though, so no complaints here even as I consider getting neutral again. CNBC is reporting overseas Yahoo! deal speculation.

10:33AM PST - Back down to Pivot. Indicators have rolled over. It's a warning, not a sign we are necessarily going to give up the day, but be careful here. Volume looks light.

10:55AM PST - That support looks increasingly dicey - broke through, but no breakdown yet... I certainly wouldn't be inclined to trade against the indicators, which are all downward sloping now as the TRIN ticks higher.

11:35AM PST - Indicators trying to repair themselves and a Supportive Volume Spike is trying to assert itself, but not so sure. Even if we hold today, I'm beginning to wonder if we may not see SPX sub-800 early in the month again before any sort of year-end rally. Frankly, I'd rather we didn't! Just idle thoughts for now -- not a researched action point here gang.

12:25PM PST - Encouraging action going into the close after the morning and mid-day retests.

CLOSE - Amazing, the fade was the trade today and key levels played well. I was a little down on the action at the mid-day, but was encouraged to see the bulls coalesce here. Looks like the Automakers took it, may help out tomorrow. Have a good one.


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