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Here is something I posted elsewhere earlier, sharing here for my AGET friends....
Marc Rinehart Tuesday, May 23, 2006, 9:10AM-- We finally see a pre-market a positive open that looks like it won't fade completely into a negative zone again before the day ends! I think we will hold up today. I said yesterday I had a feeling the market would start to stablize before we enter the Memorial Day holiday weekend but thought it might happen by Wednesday or Thursday. Maybe it is just a short-lived position-squaring rally starting? After such a harsh decline the last couple weeks, any rally is most welcomed now, but if I could pick the very best behavior I would like to see right now-- it would be just to have a period of stability before a major holiday weekend. We need something where we do not rally too strongly now-- not yet-- but we do not decline too much more. (Technically, our overall markets still has room to decline some more and yet still remain healthy longer-term.) If we stablize or drop just a little more in the next couple weeks, I can see by mid-June, we have improved odds a bigger sustainable bigger rally could actually start to develop again. I am afraid right now, if the overall market rallies strongly the next few days, or couple of weeks, it will end up petering out again, leading to a continuation of the recent harsh decline.
At this point we just have to have a wait-and-see attitude. It is times like this were we technically need the market to reveal its 'true' intentions at this point. I still have mixed feelings. As a longer-term type of trader I really would like to get some better, safer buy setups to develop. (I was getting excited because they were getting closer and closer to being where I would like to see my setups located at-- but to be honest, those buy setups I am watching for just have not yet hit my entry ranges.) Hence, I am still not convinced the total picture is here, nor am I comfortable establishing new position trades yet.
Yes, aggressive short-term or day traders can benefit from current oversold conditions, and maybe today's overall strength, BUT how long will it last before the masses try to get short again, or finally get an opportunity to cover some positions they couldn't get out earlier? Don't get me wrong, I still want to get long the market more than short. I just want to enter under my safer terms and not under the current markets highly minipulative feeling terms.
On a different note, I have to admit to being a little bit surprised to see the NY metals futures markets up strongly again overnight. The energy futures contracts holding up here wasn't a surprise, metals were a surprise. NY energy showed hints a potential short-term change-in-bias was building yesterday afternoon, the NY Unleaded Gas contract in particular. This makes sense because traditionally the summer driving season kicks off around this time of the year, and the demand for gasoline hasn't hit its peak seasonality speaking. When I look at individual energy stocks many of their longer-term trends got beat up and are very oversold. They are due for a short-term bounce. Again, I still have concerns. Is this is the best time to establish new longer-term buy and hold positions in this sector as well? Do we just aggressively do quick trades for the over sold condition bounce up? When I look at many of the leading energy related individual stocks longer-term, a lot show key supports getting close, but not really tested. Are these corrections completed? Is it time to rotate back into this area? Aggressive swing traders probably can today. Postion traders may still have some reasons to remain cautious s little while longer.
Bottomline Quick Summation: If energy and metals take off and go higher again from here, the market inflation fears continue to grow and market pressure continues to remain. It is only time we end up selling off again. However, if the energy and metals futures markets could only be allowed to weaken some more-- particularly NY HG copper or NY crude-- I could honestly can see a scenario where world stock markets benefit, and a return of a powerful and sustainable longer-term type of rally is not a crazy idea. I can even see as we get closer to the fall/winter months areas like Nasdaq or tech related stocks picking up more interest as investments as well. After 6 years of cyclical lows in the 'tech' sector-- it may be building for better days as well. Much of this is contigent on metals and energy pulling back somemore at this time. If not, consistantly trading these markets successfully remains a difficult proposition.
At this point we just have to have a wait-and-see attitude. It is times like this were we technically need the market to reveal its 'true' intentions at this point. I still have mixed feelings. As a longer-term type of trader I really would like to get some better, safer buy setups to develop. (I was getting excited because they were getting closer and closer to being where I would like to see my setups located at-- but to be honest, those buy setups I am watching for just have not yet hit my entry ranges.) Hence, I am still not convinced the total picture is here, nor am I comfortable establishing new position trades yet.
Yes, aggressive short-term or day traders can benefit from current oversold conditions, and maybe today's overall strength, BUT how long will it last before the masses try to get short again, or finally get an opportunity to cover some positions they couldn't get out earlier? Don't get me wrong, I still want to get long the market more than short. I just want to enter under my safer terms and not under the current markets highly minipulative feeling terms.
On a different note, I have to admit to being a little bit surprised to see the NY metals futures markets up strongly again overnight. The energy futures contracts holding up here wasn't a surprise, metals were a surprise. NY energy showed hints a potential short-term change-in-bias was building yesterday afternoon, the NY Unleaded Gas contract in particular. This makes sense because traditionally the summer driving season kicks off around this time of the year, and the demand for gasoline hasn't hit its peak seasonality speaking. When I look at individual energy stocks many of their longer-term trends got beat up and are very oversold. They are due for a short-term bounce. Again, I still have concerns. Is this is the best time to establish new longer-term buy and hold positions in this sector as well? Do we just aggressively do quick trades for the over sold condition bounce up? When I look at many of the leading energy related individual stocks longer-term, a lot show key supports getting close, but not really tested. Are these corrections completed? Is it time to rotate back into this area? Aggressive swing traders probably can today. Postion traders may still have some reasons to remain cautious s little while longer.
Bottomline Quick Summation: If energy and metals take off and go higher again from here, the market inflation fears continue to grow and market pressure continues to remain. It is only time we end up selling off again. However, if the energy and metals futures markets could only be allowed to weaken some more-- particularly NY HG copper or NY crude-- I could honestly can see a scenario where world stock markets benefit, and a return of a powerful and sustainable longer-term type of rally is not a crazy idea. I can even see as we get closer to the fall/winter months areas like Nasdaq or tech related stocks picking up more interest as investments as well. After 6 years of cyclical lows in the 'tech' sector-- it may be building for better days as well. Much of this is contigent on metals and energy pulling back somemore at this time. If not, consistantly trading these markets successfully remains a difficult proposition.
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