Jan 4, 2005

Happy New Year!

Well that day was one of the ugliest in recent memory. Oil stocks look like they got the worst of it with some vicious breakdowns. The metals also had their fair share of damage and I am wondering if I will regret my purchases today. Some important stocks (GE and GOOG) still look pretty good though.

The averages also do not look so bad. 68% of NYSE stocks are still above their 40 day averages and a full 82% are still above their 200 days. The percent above 40 day could be viewed as a bearish number because 69% were above the 40 day on the Dec. 7th pullback creating a negative divergence. The indicator I would really be watch here is new 52 week lows. They did not really expand on recent pullbacks and I am pretty sure most stocks have a pretty fair buffer. Without stocks making lows it is hard to imagine the momentum really getting turned around here.

I keep thinking tonight that the path of maximum frustation (at least for me) is a pullback in the S&P to 1140. Maybe it happens but I have never made any money trying to out think myself. Only one stop got hit today but many are nearby.

My small GPB / Yen trade is doing pretty well. The Euro also looks like it is breaking its uptrend against the Yen. The level to watch there looks like 138.40 .

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