Trending or chop

Sorry about dropping out of sight. I had an unexpected turn of events, but everything is working itself out. If nothing else from working the markets, I should have learned patience.

All we’re going to trade on is news out of Europe. It’s the markets versus the policy makers. The policy makers are the tactical managers of the markets. Right now it’s the policy makers’ responsibility to move the markets up to save the retirement programs, so you’re going to see “cooked” policy statements. Like “orderly default”. That’s a little like “jumbo shrimp” or “military intelligence”. The drop over the weekend was caused by the policy makers losing headway. This morning, the news is full of “Greece is running out of money” rather than “bankers take steps to support Greece”. The PM’s don’t realize that the situation is worsening and as a result, they must be on top of everything everyday, covering the situation in words.

A lot of headlines to trade off right now. Obama’s numbers have hit a new low. July business inventories fell last quarter, but are up this quarter by a tiny amount. No change in retail inventory, though. The news is bad, the market is up (on low volume).

Reports are 1000 is the buy level being watched. I think it will be awhile before we see 1000, so I’m trading long with reasonable tight stops. This week I’m looking for a pullback with a turnaround midweek (or perhaps even Tuesday) to go higher. Did you see Prada’s numbers? If the PMs do their job and spin the words, we’ll see that happen.

Margaret Brennan of Bloomberg reported that hedge funds are net short right now. So it’s time to shop for stocks. The short-covering rally will be incredible. (Remember Hedge fund managers are “retiring” and I’ve heard a lot of reports on Bloomie that “even pros are finding it difficult to make money in this market”. I’ve been long overnight now 4 nights with full positions, but I exited over the weekend, because the PM’s take a break then, but the bad news doesn’t. If we get some good news out of Europe, I think we might see the mother of all short-covering rallys.

“When the VIX is high, you buy. When the VIX is low, you go”. So where do we shop? Because of the volatility right now in individual names, I’m thinking to start buying mutual funds again. This will mitigate my individual stock exposure in an incredibly volatile market. I’ve had some fun day trading the trending ultras. It’s pretty easy.

So here’s my report on the funds: Sorry it gets all stuck together, but if you want to work with it, you can cut this and paste it into Word, replace the spaces with a “,”, and import it into Excel as a CSV file.

The order is
Fund, relative strength to S&P, 5 day rel str trend, my notes on what the ticker is.
$BKX -0.01 falling KBW bank sector index
$DJT 0.01 Flat DJ 20 Transports
$DJTCHE -.01 falling Chemicals Titans
$DJTATO 0.02 Rising
$DJTBAS -0.03 Rising
$DJTCHE 0.007 Rising
$DJTENG -0.015 Rising Dow Jones Oil & Gas Titans
$DJTCNS -0.004 Rising
$DJTFOB -0.016 Falling DJ food titans
$DJTFVS -0.005 Flat DJ titans financial
$DJTTR 0.04 Rising DJ Transports Avg Total R
$DJULTC 0.02 Rising DJ US Large Corp Tech index
$DRG.X -0.02 Rising NYSE ARCA Pharms index
$HIG.X -0.01 Flat
$OIX.X -0.01 Flat
$SOX.X 0.02 falling Philx Semiconductor sector
BBH 0.02 Rising Biotech Holders Tr Depository Recpts
DBA -0.07 Falling
DIG -0.004 Falling
GDX -0.02 Rising Gminers
GEX -0.02 Falling
GLD -0.04 Falling Gold
IAK 0 falling Ishares Imsurance index
IBB 0.004 Rising iShares NASDAQ Bio index
ICF -0.01 Flat Cohen &St Realty
IGV 0.02 falling Ishares NA Software
IHE -0.006 Rising Ishares DJ Pharma index
IHI 0.001 Rising Ishares DJ Med devices
IRET -0.06 Falling Investors Real Estate Trust
ITA 0.018 Flat
ITB -0.006 Flat
IXI 0.01 Flat
IXJ 0.02 Rising Ishares Tr S&P Global Healthcare
IYE -0.014 Flat Ishares tr DJ US energy
IYH -0.009 Rising Ishares Tr DJ US Healthcare
IYZ -0.009 Rising Telecomms
KBE -0.016 Falling SPDR KBW Banks
KCE -0.003 Falling SPDR CAP
KIE -0.016 Falling SPDR Insurance
KOL -0.07 Falling Coals
KRE -0.01 Falling SPDR KBW regional Bnaks
OIH -0.03 Falling Oil Svc Holders
RTH 0.012 Rising Retail Holder's Trust JWN=0.12, flat TIF=0.16, high URBN=.24, high
SLV -0.046 Rising
SLX -0.018 Flat Steels
SMH 0.018 Falling Semi trust holders dep rcpt
TAN -0.104 Falling Solars
UCC 0 Falling Proshares consumer Services
USO -0.06 Falling
UTH -0.01 Flat Utilities holders Trust depository rcpt
VHT -0.005 Rising Vanguard World FDS Healthcare
XBI -0.001 Flat SPDR S&P Biotech
XES -0.023 Falling S&P SPDR Oil & Gas Equipment
XHB -0.004 Flat
XLF -0.017 Falling SPDR SBI INT Financial
XLK 0.01 Flat SPDR tr SBI int-Tech
XLP -0.014 Rising
XLU -0.009 Rising Utils
XLV -0.015 Rising SPDR Tr SBI healthcare
XME -0.03 Falling Metals and Mining
XOP -0.014 Flat SPDR Oil & Gas
XRT -0.004 Falling SPDR S&P retail

Doing a quick sort, the worst performers are
TAN DBA KOL IRET USO SLV GLD $DJTBAS
And the only rising trends are SLV and $DJTBAS

The best performers are
$DJTTR IXJ IGV, BBH $SOX.X $DJULTC $DJTATO

I think I know Thor is into F, and it seems autos are doing well. One of the best performers and a rising relative strength trend.

I read a report this AM that the money flow is out of the market. Looks like Mutt’s observation that the pressure is downward is accurate.