Wednesday, January 09, 2008

Tick Tick Tick

The acupressure is killing me.

Market action remains weak and the market continues eroding further, but so far today there has been no fantastic volatility and no real emotion or capitulation; even though volume is heavy. We are churning down here and so far there is nothing suggesting the pressure is near any conclusion.

While medical and biopharmaceutical groups remain firm, elsewhere it is the leadership groups getting hit worst today (that's the catch-down action I wanted to avoid and I'm getting hit in the fertilizer and solar names left in my position). I blew out the YGE at 32.04, but I have JASO, CSIQ and TNH boulders on my back still at moment. My overall position is light, but my mental state is wary and waning.

Too late to sell, too early to buy? Something like that.

The bottom line is that we need a catalyst and I think we all know what that is. The Fed's hand is forced - I am wondering if new financial horrors out there will force interim-meeting action (Bernanke speaks somewhere tomorrow as well); but regardless of how and when, the Fed will be cutting rates dramatically and at that point the growth stocks will begin a dramatic rally. Growth stocks don't necessarily care about recession when rates are dramatically reduced.

The question is how much we erode away on the downside first.

Two things to watch near term. We're still watching for a flush-and-potential-rush whereby the S&P 500 challenges intraday August lows (it may well flush below that level when this occurs, but it may also manage the reversal rush, even from lower-low levels. I use the time of day criteria I illustrated last night and a few other tools I've branded into my insides to determine when and how much to dive in.

If we break the August SPX lows and don't reverse in that session, then it is no longer too late to sell; they'll be no more support to hang hope until the market heals and proves itself.

I'm lightly exposed, but I am still taking rope-a-dope shots to the body and I'm getting nervous this beast is going to out-last me. I'm not committing new money long until the market shows me better (what genius).

Ah, fresh new lows are hitting now. Volume is heavy and the time of day is not yet negative for lower-lows. We'll see what develops. I may or may not get ripped out of the rest of these uglies before the day is out - or I may or may not add exposure instead; should the market pull off a higher-volume reversal today.

Current Portfolio (by size): GENZ, OII, CVI, JASO, SYT, CAF, TNH, CSIQ

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