Monday, August 21, 2006

Another Crappy Monday Part Dieux

Well I lied - I didn't make money today - instead I lost it. Started out with FTO and lost 20 cents. Followed that with BRCM and CELL and lost 20 cents on BRCM and 20 cents on CELL. Sounds like a broken record and it is. Fortunately nothing really that bad and with any luck I'll make it up during the week.

But I violated one of my touchstones which is - if there are two red bars in the first three 15-minute bars on the DIA then wait for a confirmation of a turnaround before you trade. I didn't and I lost. It is that simple.

Today was more like a consolidation than anything else. Although it seems hardly possible the volume on both the Q's and the SPY was below Friday's and the DIA's volume wasn't much better than. They all printed a doji or doji like candle for the day. Now the doji doesn't necessarily mean that they are through going up because it is a resting configuration. As I noted over the weekend three gaps usually requires a rest whether it is up or down so the market rested today. That kind of matches my "I don't know" guess from the other day.

The VIX remains 10% off its 10 day moving average but the up/down ratio is 34% which is good - indicates a consolidation taking place. The new 20-day highs vs lows sits at 416 to 176. The 416 number is a good value in that it means that some of the pressure is off but the 176 number still indicates that there is nothing to buy yet i.e. there is no selling of note going on. The DIA printed a strong white candle at the last hour, SPY printed a moderate white and the Q's printed a strong red.

My hunch is that today was a retail scaredy cat day when all the retail buyers started getting out of their little positions for some profits but the institutions remained invested.

So what does all this mean for tomorrow? I could see a weak opening with a strong finish. But I've got a day's worth of personal business so I won't be trading. I'll do a wrap tomorrow night.

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