Monday, November 29, 2010

Technical Picture - Minor Losses

Equities were weak in early trade as the European debt situation and instability in Korean peninsula stoked the fear index. However, stocks staged a late session rally following the open market operations which allowed dealers to unload some $9 billion in treasuries. Leadership was provided by Oil, metals, and financials. Laggards included solar, retail and biotechs.

E-mini futures have weakened and given back most of the late day gains as I write this post.

Looking forward to tomorrow, the last day of the month...will we close above 1200?

The percentage of stocks trading above their 5o MA has deteriorated 30% since peaking in October.

The Euro has retraced 50% of the June-Oct. rally in a relatively short period of time. Now I expect a small bounce back up to retest the broken trendline, however, the European debt crisis is far from over.
GLD and the Euro were fairly well in sync since Sept., but now we see a decoupling taking shape. This should be followed closely as it will impact the H&S top we've been watching develop on the GLD chart.

The best trade today was AMRN in pre-market. As I tweeted in pre-market, Amarin's AMR101 meets pivotal phase 3 study endpoints with highly statistically significant reductions in triglycerides and we had strong pre-mrkt volume.

I added to the position after it broke out of the handle. I exit when the price bars failed to turn red on a higher high, implying relative strength was abating.

The late day rally was a low volatility breakout after an extended period of choppy trade amid really low volume. I missed the actual BO because I was busy trying not to nod off during the snooze fest. Went long as the flag broke and took it to the full extension.

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