July 28, 2010

Market dropped within wide pivot on low volume.

Short-term: 3 yellow, 1 red – tending yellow
Intermediate-term: 3 green, 1 yellow – tending yellow/green
Stock target: 27% swimming, 35% neutral, 37% sinking

Huge change in the stock targets in the last few days as the highly-correlated index-driven stocks all cross technical thresholds at the same time. Still may be another down day or few to clear the overbought conditions – but setting up for a top-down index-driven ramp up through resistance and squeeze shorts on the other side. If it fails, they’ll run out of earnings season – and there is no more ammo left to deal with the steady drip-drip-drip of a leaking economy.

I don’t have any confidence in my ability to play this volatility after a few days — but I dread being the long-dollar bagholder of cash that allows others to play their games. What to do what to do.

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