Market Analysis:
The market pulled back on very light volume Tuesday. Earnings season is in full force and the market dropped in the AM due to ATT, DuPont, MCD and the housing report. This pullback was ideal entry for the long swing trade. The market recovered to strong support by midday despite lagging market internals. Keep an eye on spx1370 support and always look at the market in context of previous sessions. Because this looks to be a healthy consolidation pullback before another move higher. Although the market did sell off Tuesday, we may be setting up for another leg up. The reality of this market is that ultimately it will respond to the fundamentals of the economy. But it often takes a while for reality to intrude, but it eventually always does. Until then, the smart minds banks coin...
Sentiment Analysis of RIMM
There are a few contrarion indicators that have caught my attention. One of them is this week's IBD 100 highlighting RIM as a "buy". One thing I've noticed over the years with this publication is that once they highlight a stock as being at a buy point, as they did above, the stock is usually is good for a 5-7% move up from that buy point before rolling over. I've seen this phenomena enough times to rely on it as one contrary indicator. This is inline with the fact that most news that comes over AP, magazines, and the internet is not only delayed and discounted, but quite possibly propagations originating from Wall Street. Yes, they are that powerful. This has been going on for decades and is nothing new. It is the reason, as a trader, I never get married to ANY position and although I just initiated some long trades, the weak volume in RIM should raise caution flags. RIM is definitely a strong buy here ahead of Apple earnings. Enjoy the ride but be nimble and know when to get off the ride!
The second contrarian indicator is the amount of coverage RIM has been getting on CNBC. Yes those cheering hotties (see pic above) can hypnotize even the most focused traders. And with JC calling for $150 the day before RIM pulls back smells much like the WM play a week ago, where GS did a similar manuever before taking it up huge. I've met Jim before and never really liked the fact the man hardly makes eye contact. That reveals much about a person, much more than his words.
Happy Trading!
Cash
Quote of the Day
"Madness is rare in individuals - but in groups, parties, and nations, and ages it is the RULE" - Friedrich Nietzche
Trade Signal of the Day
Strong Buy
Disclosure
LONG RIMM
Video of the Day
My Plan for the Weekend
3 comments:
Your call has been spot on. Rather than undo my put position I have been riding my portfolio value the wrong way. Strikes me with this unconscious ride up today that we are near your 125 target and that the elevator ride down you have alluded to is coming in the next few days?
Based on the message board, I guess I get the sense that the high run up on no volume may be near the end
Thanks, the Friday blog will address this.
Cash
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