Wednesday, September 10, 2008

Heading Towards the Close

After spending the New York lunch hour and much of the afternoon bouncing around in a somewhat loose trading range, a sudden wave of buying about an hour ago sent the market to the best levels of the session. While the move was been broad-based, most of the buying was concentrated in the financials, which enjoyed about a 2% bounce on no apparent catalyst. Although the averages have given up a portion of those recent gains, they are still sporting solid gains as we head into the final hour. Meanwhile, breadth has improved, but at 1.2:1, it’s not convincingly positive, and volume is still pretty light.

Despite today’s mild bounce, our biggest complaint with this market recently remains painfully apparent. With energy up more than 4%, it’s obvious traders are playing an oversold bounce in that group, but whatever decent technical set-ups there are out there (and there are very few) continue to be ignored. A lot of that has to do with the complete lack of leadership, and until that changes, the best option for those who don’t want to simply sit in cash is to either try to catch these very short-term bounces, or wait for short-side set-ups to develop once again.

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