Wednesday, August 03, 2011

Bouncy Bouncy

Stock bounceI am still long the $QQQ trade from last Friday.

It never feels good to see the trade thesis blasted. The SP500 fell below the 200dma, which many use to denote a bear market. The index also fell below the March and June lows, breaking resistance. Many view this as a sign the market is going lower.

I am not a stickler on the technicals. Obviously I watch them, but I think the market fudges a little around the moving averages and other metrics. It's not exact. So, I have viewed it as a concern but since I entered the trade near the bottom of the trading range have some wiggle room before I get out of the trade.

The market bounced significantly off the lows today. Many are saying that it's just short covering. But a lot of times, that's how reversals start.

Watching... No changes in positions. The QQQ trade is still on, I have some cash, low beta stuff, and some oil. The latter has been a bit ugly. But this is more of a fundamental play for me as I view energy prices only going higher with the economy and a reluctance to use any other viable forms of energy other than oil for transportation.

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