Coolhand's Market Analysis

When it turns, it turns hard and it turns fast. So fast that's it very difficult to get in front of. Momentum is powerful thing and we saw more evidence of that today as the broader market tacked on significant gains for the fourth day in a row.

The negative news out Europe has now largely been neutralized (at least for the moment) with news that the European Central Bank has coordinated with the Fed and other central banks to extend dollar loans to European banks. In essence, our Federal Reserve is pledging support to banks overseas. I'm not sure exactly what that means, but the market apparently likes it.

There was also some market data released earlier in the day. Initial jobless claims came in at 428,000, which was above expectations of 410,000 claims.

Consumer prices for August were up 0.4%, which was twice what was expected, while core prices showed a 0.2% increase, which was in-line with expectations.

The September Empire State Manufacturing Survey dropped to -8.8, which was more than double economists estimates, while the Philadelphia Fed Survey for September "improved" to -17.5, after the -30.7 showing the previous month.

So much of the economic data points remain negative, but who cares when there's a punch bowl available.

Here's today's charts:



NAMO and NYMO climbed higher today and remain in buy conditions.



NAHL and NYHL remained on buys too, but continue to show only modest movement.



TRIN dropped lower today and into a more overbought condition, while TRINQ actually moved to a more neutral reading, but still remaining on a buy.



BPCOMPQ rose again and is getting close to flipping back to a buy signal, but remains in a sell condition unless it can move above that upper bollinger band.

So the charts look more bullish, but in a bear market that can be misleading when trying discern upward targets. So while I do anticipate higher prices now, I believe most of the gains are behind us once again. So is the risk worth the perceived reward?

I know it can be tempting to get invested again if one is sitting on the sidelines watching these rallies mount up gains, because we can feel like this market is leaving us behind. But this isn't a sprint, it's a marathon. And I really don't think the current rally is about fundamentals, but rather the big money taking advantage of bearish sentiment and market shorts. And they move fast, which is okay if one can execute trades at will and be nimble, but we can't. So I am more about managing risk right now and if I don't get a set-up I trust, I don't play.

I've long since recognized that no matter how hard I try there are going to be times when I am not positioned to take advantage of fast market moves. But I also recognize that there are always more opportunities on the way.