Saturday, May 31, 2008

1st week of a new month biases...

As is the trend, we ran pretty good into the end of the month. So, where do we go from here? The initial trend would be twofold (actually 3);

A)reverse the prior months biases. Meaning that the stuff that was cold, mainly, will play catch up IF the market is destined for higher ground. So, brokers, banks, and maybe even home builders would have an up week this week. This bias is not as profound as end of quarter Window Dressing, one of our stronger trends, but it does come into play.

B)Sell in May, go away. This is a saying everyone knows for a reason, it usually proves to be true. Historically we are coming into a bad time for the markets to try to hold onto gains. BUT, shortly we'll be back into earnings season, and the thing is in this market the momentum names are very attractive for a trade into these earnings. Ya never know when that will end, but some sectors, particularly the Ags and Solars are still early stage enough to trade them. I may do an EARNINGS RUNNER list and class this quarter for earnings, let's see how it plays out.

C)Let's watch the news flow this week. This is a key week for us as traders. The market closed Friday literally right at strong resistence. 1400 on the ES and roughly 750 on the ER. I think if we get a gap monday it's fadeable either way as traders will try to figure out if we are going to bust that resistence and attempt to head for yearly highs, or if we are going to get a steeper pullback.

I was leaning shorter and still kinda/sorta am, but I'm more neutral than anything else here and would prefer to stay nimble. There are many times when we have a clear bias, this isn't one of them. Let's see how it pans out!

TUESDAY 9;15 to 10:30 we are doing a FREE class and we'll discuss the upcoming June LIVE trading seminar, with money back guarentee! So, try to be there, its FREE, no risk, all reward!

See ya on the other side,

Michael "Waxie" Parness

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