Consolidation Day

Nothing really exciting about the market today. This kind of price action is healthy if we want the current swing to continue and not flame out after one day, especially after a 416 point day on the Dow yesterday. My favorite headline was over at CBSMarketwatch, which was titled "Fed Rally Breaks Apart After One Day." Someone over there must have finally figured out how ridiculous it was to run that kind of headline after a 416 point gain yesterday and a 47 point consolidation today so they changed it to "Investors Feed on Fed Rally." Anyway, I was thinking that things could be a little squishy tomorrow with the Retail Sales and Initial Jobless Claims in the morning. But the ultimate contrarian in me loves those kinds of foolish headlines like CBSMW ran earlier, so I started feeling stronger about tomorrow just on that alone. If we come in decent with the numbers tomorrow, then the swing may continue for another day and I will ride my calls some more while continuing to scale out a little. If we are really strong tomorrow, I will be cautious ahead of the CPI on Friday because we may get some inflationary numbers that attenuate the Fed Funds Futures and rate cut expectations a little.

I took some nice partial profits on the DIA, SPY, STLD, and TEX trades today and I took all of CRM and RIG out for profits. I entered SWN on a split trade, and I intra-day traded EOG and OXY, but nothing special there. I am still in some or all calls on DIA, SPY, STLD, EOG, OXY, SWN, and TEX. I am watching FCX and GENZ for potential channel breaks. And of course, keeping an eye on my watchlist.

Some nice movers today:
Energy: CAM, HES
Copper: FCX
Tech Services: PCLN
Semiconductors: WFR, FSLR
Financial Services: MA, COF
Steel/Metals: STLD, CLF
Machinery/Manufacturing/Agriculture: CAT, CMI, TEX, IR

Here is a look at the nice consolidation today on 2 time frames: Daily and 60m

This is the Daily Chart showing the 1340 area as a solid resistance zone near term.
(click on chart to enlarge)

This is the 60m Chart showing the nice Bull Flag consolidation intraday.
(click on chart to enlarge)

We will see how this all turns out tomorrow. If the market starts selling off below the 1295-1300 area then I will be stopping out of all my calls. If it goes the other way and it reaches 1335-1340 then I will be take profits on 80% or more of my positions. As always, we shall see...