July 15th, 2010

Sitting on Your Hands Can Be Painful

I don’t usually follow the market this closely and it’s very uncomfortable for me to track what’s happening from minute-to-minute, hour-by-hour, day-to-day. But I’ve been pretty much out of and even shorted the market. Since the Black Cross of last week, I have been waiting for a big, quick move to the downside. Instead, I’ve had to endure watching a 7.5% move up.

I love you guys and love writing this blog and I’d much rather be writing about the industries that appear to be attracting the hot money or stocks that seem to be leading the market up. Sitting on my hands waiting for the correction to end is excruciating.

What can I say other than “thank God this day is over”. The day started with the market failing for the third time to cross above the descending 50-dma and then staying in the red for most of the day. Until the final 30 minutes, that is, when it burst ahead by 1.2% to close above the moving average.

Here’s what the longer-term chart looks like:

The market has been stuck in a box for three days exactly at the 50-day moving average. It touched just under 1100 on an intra-day basis in each of the last three days and three times it dropped back below that level. What better example of buyers and sellers, bulls and bears being completely in equilibrium. I don’t know if anyone can predict who’s going to win this tug of war to move the market higher or lower.

For me, I can’t buy any stock until the all-cash alert is reversed, which could happen if the Index moves back above the 200-dma. Will the capping of the Gulf oil well spill and the GS-SEC settlement be the tipping point? We’ll see tomorrow.

Subscribe below or click here to learn more about help for navigating turbulent markets.
  • Anonymous

    GURU,,you may just need a few weeks in Florida to clear your mind and lick your wounds..Charles Nenner could be wrong someday…Sent us a postcard ..Good luck..

  • Anonymous

    GURU,,you may just need a few weeks in Florida to clear your mind and lick your wounds..Charles Nenner could be wrong someday…Sent us a postcard ..Good luck..

  • Robert

    You write a very interesting blog, Thanks and please keep it coming…

  • Joe

    Thank you, Robert, for your words of encouragement. This market has been frustrating and personally disappointing over the last several.

  • Bala

    yes the mkt is very frustating, friday's selloff on high volume should give hope to test the lows. where did you get the intraday 1-minute chart?

  • Joe

    Intra-day one minute comes from my Fidelity Active Trader trading platform.

  • Anonymous

    Thank you for sharing your thought. Doug Kass said we had the yearly low, I agree with him. SPX still rest on 300 dma, just like 2006 correction, we need to wait for 50 dma to turn up…

    OA

  • Joe

    OA, have to respectfully disagree with you and Douggie. I think Index will cross below the 300-dma sometime this week or next and continue back at least to 1010 or lower. Then maybe you'll start filtering out what he and Dennis Gartman say and listen only to me instead.

  • Anonymous

    10 years treasure yield going to reverse from here? -> SPX up