Friday, May 23, 2008

today's action

quite often, the thin trading in front of a holiday has a positive bias. that wasn't the case today, as stubbornly high crude oil prices kept market players uneasy. breadth was poor with better than two losers for every gainer. gold and solar energy showed some relative strength, with oil services, steel, coal, biotechnology, financials and energy struggling.

interestingly, oil stocks are softening, while crude oil is holding up quite well, but what is really worrisome is the continued pressure on the financial sector, which indicates that many are expecting more bad news for the group.

for those that believe, technically, it was a very poor week for the major indices. the uptrend line that has been in place since the march low was breached, and we could only manage an extremely weak bounce thursday before the downtrend resumed today.

the good news is that we are now a bit oversold and ripe for some sort of short-term bounce. in addition, a lot of attractive stocks are now pulling back to key support level. while the overall market mood has definitely darkened, we are now starting to see some very severe pullbacks which may present opportunities in the near term. i will definitely be working on a shopping list this weekend, although i don't think there will be any rush to jump in.

No comments: