Uncertainty Lingers

 | Sep 13, 2011 | 4:40 PM EDT  | Comments
  • Comment
  • Print Print
  • Print

A lack of negative news was all we needed to tack on decent gains following yesterday's strong finish. Volume was light and a bit choppy but the bulls were hungry for action and managed to push things along nicely after the early morning bounce was sold.

While two days of decent gains are a nice change after last week's rough action, it doesn't do anything to change the big picture. We have been in a trading range with 1120-1125 of the S&P 500 as the floor since Aug. 8. Despite one low-volume, window-dressing run in late August, we have not been able to turn the trend back up.

My major concern is that if we test that support at 1120-1125 again, I do not think it will hold and we'll see another ugly leg down. Unfortunately, with the negative news flow out of Europe, we have a potential catalyst in place for that retest.

While I don't have a very bullish view longer term, I'm happy to knock out some countertrend trades on days like today. Some of the biggest and sharpest bounces come within downtrends and they can make for good trading. The challenge is that it isn't always easy to find the right vehicles. This poor market hasn't created a lot of good charts, and if you want to buy, you may have to take something that is less than ideal.

The European situation is a big unknown, and it can remain uncertain for quite some time. We can navigate through it by staying short term and reactionary, but we'll have to be especially vigilant.

Have a good evening. I'll see you tomorrow.

Columnist Conversations

Cummins Inc (CMI)recently generated a long term oversold condition. CMI is now trading below the 200 Daily Mov...
Micron is attracting a heavy selling wave this morning as shares are dragged down over 7% on Samsung's n...
Lang:
There are million reasons to sell but only ONE reason to buy. So, we have some heavy selling today that is co...
the dow 30 is now +.9% for 2014. not 9%, but .9%. thus it wont take much more selling to move the dow 30 to a ...

BEST IDEAS

REAL MONEY'S BEST IDEAS

Columnist Tweets

BROKERAGE PARTNERS

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.


TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.