Thursday, September 16, 2010

Third time lucky??

The bulls continued their impressive run with another day of consolidation, making it three consecutive days of consolidation now. This market action is bullish, no two ways about it. And the bulls look set to have a crack at 1130. But it's important not to get complacent here if you are long. Take a look at the daily S&P chart below. This bullish consolidation is not very different from what happened in June and early August before the market took a crack at 1130 and I don't need to tell you readers how that ended. Make no mistake, I am still bullish but I am also very aware of the possibility that this might be another failed attempt for the market to break out of the range.

Turning our attention to small caps, Russell 2000 also looks very bullish right now and is finding support at MA(200).

Personally speaking, I entered LDK at 8.15 and JASO at 7.35. The solar sector looks really good to me here but more on that later.

So, will it be third time lucky for the bulls? Somehow it makes sense, given the twisted sense of humor it is famous for, for the market to take a crack at 1130 on options expiration day. I have a feeling we are in for an exciting day tomorrow.

Take care and good luck!

P.S.: Chart of the Day and a Watchlist for tomorrow are now up.

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