Nov 4, 2004

Wrong and Wronger

The dollar continues down the rabbit hole. My confidence in a long-side trade is ebbing. I will give it one more day and then lean towards shorting the next bounce, perhaps around the former 85 support. There was some strong economic data out of Britain that caused some of the weakness but it is hard to not see it as associated with the election.

I expect equities to linger around the same levels today, maybe trading slightly up. I continue looking through volume scans to find stocks that have momentum and will try to add positions slowly. The last few days have been quite strong and I don't think very many people participated in the rally. The indices probably need a pullback and you are seeing a bit of that with the selling in the nets and semis but it remains to be seen if the market at large comes back. Remember two Mondays (a week and a half) ago when the insurance scandal was going to collapse the market? There will probably be more obvious buying opportunities ahead.

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