Thursday, July 3, 2008

About Shark Watch

Thursday, July 3 - 1:27 PM

Afternoon Comments

Given the downright terrible action we saw into the close yesterday, the thin trading environment, the jobs report that was in-line with expectations and a lack of an major surprises from Jean-Claude Trichet, it isn’t all that surprising that we had a mildly positive but lackluster trading session. That said, oil just absolutely refuses to pull back, and until that happens in a meaningful way, it’s hard to see how this market is going to be able to even manage a respectable oversold bounce.

In the final analysis, we had a typical, thin pre-holiday trading session, and the action today did nothing to change the fact that we are in a technically broken market. Yes, we are extended to the downside, but as we’ve seen this week, that’s no guarantee of any reflexive action to the upside. Trying to time such things is a dangerous game to play, and the best thing we can do is wait for one to start taking shape before we jump on for the ride. In the meantime, the best place for us to be is in the safety of cash. There are going to be some great opportunities down the road. We just have to be patient and let this market come to us.

Have a great three day weekend. We’ll see you on Monday.

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