Wednesday, April 8, 2009

Another Choppy Session

I think I wrote yesterday that I expected the trading to be choppy today, and that was certainly the case. There were several big reversals during the day, but in the end, the indices were able to close out the day with decent gains on pretty good breadth. Earnings news from BBBY and FDO helped retailers outperform, while big-cap tech again showed signs of leadership.

However, probably the most encouraging action was in several of the individual names I’ve been keeping on my watchlists. There was some active trading in many of those names, and while traders had an eye towards flipping for quick gains, the churning action helped to develop some of the set-ups.

The bottom line is that I expect things to continue to be choppy as we close out the week. Market players have been trained to maintain short time-frames, and this thin environment will only exacerbate that. As such, make sure you’re booking gains where you have them and don’t put too much trust into pullbacks. We’ll just simply have to wait to see how earnings season begins to develop before we can think about adjusting our approach. Could we be setting up for some of the larger banks to "beat" on first quarter, given the beat-down the stocks got in the fourth quarter of '08? We'll see......

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