Market Still Indicisive Above the 20dma

10:00 pm MT: I am inserting this post in this spot so no one misses it. I want to make a quick comment about the Energy and Commodity setups from yesterday into this morning. Technical signals are technical signals, and many Energy and Commodity stocks had a great technical signal for puts, which were on their way to confirming this morning. Everything looked great, a lot of money was going to be made. And then it reversed intra-day. I made the comment that it could be Buyers Remorse, it could be Desperate Bullishness on the part of many Fund Managers, or it could be real Institutional buying. Whatever it is, it killed the signal. So I started scaling out of the Energy and Commodity puts, which I may finish exiting tomorrow. Now, after a failed signal, I will wait for a confirming signal to re-enter any puts if they are there. After a failed signal, I always switch from Cherry Picking mode to Confirmed Signal mode. I'm not sure what will happen in the next several days, but because of the failed signal in Energy and Commodities, I am guessing that it could be at least several more trading days, and maybe several weeks, before we know if the sectors are headed for consolidation or not. It may be that there is another round of call-trades in the current swing. That would be somewhat of a statistical anomaly, but it fits the pattern for the emotions frenetic traders. I have learned to never underestimate the freneticism of traders. You trade what you see, no matter how unbelievable or illogical it appears.

The Weekly Jobless Claims came in slightly better than expected, which put an early morning bid under Energy and Commodity stocks. Same Store Sales came in mixed, which is keeping Retail soft. It looks like the market might still fade into the close, but we shall see throughout the day.

10:30 am MT: I went through and cleaned out all the stuff I don't like right now technically. NOV was obviously a stop out with a loss of 32%. I don't like taking losses that large, but this was an anomaly. It seems that NOV lost/settled some kind of pending lawsuit and traders took it as a big positive. So NOV is up sharply, when all the rest of Energy is looking like it will roll over. From time to time a trader gets blindsided by a news bomb, and that's how it goes.

In addition to NOV, here are some more sells today: I locked and walked on IBM for a 26.5% gain. I time stopped CAT for a 14% loss. I stopped out of GES for a 25% loss, but on a half sized position, so it was minimal damage. I also stopped out of KSS for a 75 cent loss, which was 29%, so again, minimal damage. I just can't see what's going on in Retail right now.

I am still holding the MDR, CL, ESV, MUR, MON, MOS, and CF puts, which all started down today, but most of them have fought back. If we fade those into the close, then it was Big Money letting Sucker Money with Buyers Remorse get their last shot at what they think is a pullback. I'm still looking at those trades as rollovers, though, but we shall see. There is a lot of Buyers Remorse out there amongst Amateur Traders, and Smaller Money. Many of them did not participate in the big upswing in Energy and Commodity stocks this past week, and it's making for an interesting game between Amateurs and Professionals right now. It will be interesting to see what the Professionals think of those sectors in the next couple of days. CL and CF look pretty good. I also picked up puts on WFT on a Double-Top Divergence setup, and I picked up puts on BHI and XTO, which might finish the day as Harami Crosses.

I am only holding the AKAM calls, and the half-size calls on ADSK. If the market does rally a bit on a drop in Energy and Commodity stocks, it may only be a half-hearted rally, and Tech might be the only area that bumps up significantly. If selling does hit Energy and Commodities, it may be enough to take everything down because no-one wants to rotate. Retail and Financials just don't seem to want to participate in anything right now. I may be wrong, and those areas could all take off on a nice rally, but that's the way I'm playing it. If Energy and Commodities take off to the upside, then I will stop out of all the puts, ride the Tech stocks, and see if the market looks like it really wants to go stronger Bullish.

1:00 pm MT: Not much has changed in the past several hours. I'm not convinced of a bounce in Financials yet, although nibbling in on AXP or a Broker is ok. Everything seems to be hovering around waiting to see which way this breaks. We may finish the day pretty indicisive. I'm getting fairly close to some stop out points on a couple of the puts. We may not see this market go in motion with conviction for another trading day or two. It seems to almost be getting quieter.

1:25 pm MT: I stopped the WFT put for a 90 cent loss, or 17%. I'm continuing to reduce some positions as the market gets a little more indicisive. I also sold half the CL puts for a 40% gain.

1:45 pm MT: I continue to cull down the positions. I stopped out of the ESV put for a 90 cent loss, or 16%. I stopped out of the MDR put for a 70 cent loss, or 18%. I scratched the ADSK call for an 18 cent loss on half a position, so pretty minimal losses on those. I sold the MUR put for a 25 cent profit, or 6.4% gain. Also, earlier in the day I picked up a small put position on ADM. I have now culled back about 45% of the trades that I was holding - going into today. I have kept the losses very manageable, as you can see, and I had a couple of profitable trades. The only thing that zinged me was NOV, and that was a News Bomb, which I have no control over. As far as my trade management, I'm very comfortable with where I am after the culling, going into the close today.

2:15 pm MT: It looks like Buyers Remorse is winning out over Slowing Consumption for now. It will be interesting to see how the American Consumer holds up this summer in the face of pretty heavy energy and goods inflation. Today, the market looked a little leery, hence the indecisive day. So I don't want to be too loaded up on trades until I see another sign that the market is tipping its hand. I thought the tip was yesterday in Energy and Commodities, but it may be several more days until we get a clearer signal. I am having a hard time bringing myself around to being wildly bullish, even with the interest rate cuts, because those cuts are a two-edged sword. The Fed may have stopped the Financial sector implosion, but it created a lot of inflation in energy, food, and consumer goods. This is a tough read, so it's more important than ever to pay close attention to the charts, and to use shorter time-frame trading strategies if the charts start to get a little choppy.

8:15 pm MT: Sector Wrap: CNQ and ATW will probably give Energy stocks a little boost in the morning because they reported better than expected earnings, and their stocks are up a little bit after-hours. PCLN will give Tech a little boost because the company beat earnings expectations after the close. NVDA will offset that a little in Tech because the stock is down after-hours on their earnings report. I am ready to stop out of my Energy and Commodity puts tomorrow, which may happen. I would rather see Energy and Commodity stocks consolidate during the summer, and Tech, Financials, and Retail go up during the summer. That would be my best case scenario for a bullish market. But right now, it may be that just the opposite happens, which may make for some squishy times in the Global Economy for the rest of the year. We shall see.....

8:15 pm MT: Market Wrap: Asian stocks are currently down on a warning from Toyota that the company will experience the first full-year profit drop in 7 years. This is interesting because Toyota sells gas-friendly cars, whereas GM and Ford are struggling because of a drop in Truck and SUV sales. Financials, especially Banks ($BKX), and Insurance ($IUX), broke diagonal support lines, and Retail ($RLX), along with many Retail stocks, also broke diagonal support lines after some soft Same Store Sales numbers today. AIG is going to exacerbate the situation in Financials because the company reported poor earnings after the close, and the stock is down over $3.00, or down more than 7% after-hours. This underscores my theme of weakening conditions technically in Financials and Retail. This will also probably set up a key support test tomorrow for the major indexes.

The Dow has support at 12,750. A break below that number will be a warning Flag that the Dow may be going back to Intermediate Term Neutral. A drop below 12,600 would confirm the posture.

The SPX has support at 1,380. A break below that number will be a warning Flag that the SPX may be going back to Intermediate Term Neutral. A drop below 1,365 would confirm the posture.

The Naz has support at 2,400. A break below that number will be a warning Flag that the Naz may be going back to Intermediate Term Neutral. A drop below 2,350 would confirm the posture.