Critical Times
August 1st, 2006 by BWV
Middle East troubles.. Fed decision.. Earnings season..
All this just as the markets are coiled up right at a crucial juncture that will determine whether we go test the May highs — providing a lush trading environment for folks like me — or whether the 2000-2002 Bear market gets resuscitated.
Using Dow futures as a proxy, a close above 11,250 would mean a renewed uptrend that should last a few months. A close below the two June and July bottoms around 10,750 awakes the Bear from hibernation. Right now we’re fading off the summer’s downtrend line. How this pullback is treated over the next 2 weeks will make a huge difference in strategy selection going into the fall.
Speaking of declines, Amazon.com is living its’ own personal Bear. After a complete mauling last week on earnings news, AMZN bounced small for a few days.. just enough to relieve the oversold condition and allow a renewed selloff. We added to the short today.
Still have plenty of longs though..
We reloaded our Smith & Wesson yesterday as the stock makes a little flag after the July pullback. I’m looking for the uptrend to resume & would add more on a high volume break North.
We bought some IPII today, which is catching attention as a hurricane play.. they sell construction materials to rebulders/remodelers in the southern states.
So that IRA accounts can participate in the indicies’ current downdraft, it’s possible we’ll make our first trade in the Inverse ETF’s later this afternoon.
Long IPII, SWHC
Short AMZN
