A Lot of Reversals Today

A lot of reversals today in stocks that were strong for ... a whopping 2-3 sessions. :) The market continues to be finicky. I did cut back the solar companies a bit more as they reversed and showcased their extreme volatility (this is why I don't like to hold large positions in them for extended periods). I do see some gaps in the chart which look ominous so I'll remount positions if we reach those levels. Same for the fertilizer names - there are some serious gaps in charts that will be filled eventually... or soon.

I did reverse the Foster Wheeler (FWLT) trade today, which was really my only major purchase of the day, and took some more incremental profits in a few other names. I'll be watching the charts of any names I recently added to, and if they begin to fall down below key moving averages I'll cut back exposure. So I might be adding or subtracting the same name a lot as it peaks above or trends below a moving average.

I've moved cash to 21% and started rebuilding Ultrashorts but again we are at the conundrum of what exactly to add... financials, real estate, etc are actually the strong parts of the market right now. So I'm just adding a bit to everything since I don't know what mood the market will wake up tomorrow (punish financials? love financials? punish commodities? love commodities?)

I'll update my holdings soon since I made some haircuts today. We seem to be having a lot of trouble with S&P 1380 right now (breaking above it). So we're in a tight range, 1380-1385 to the top, and 1350 to the bottom. If we can get back over 1390 or so we will have surpassed another recent high (late February) and then we have to deal with the next high in the upper 1390s (early February) and should be able to continue to move upward. But this is a lot of resistance to work through as the past few days have shown... we need more buyers coming to the market for this to continue up...



After a couple of "easy days" the market continues to be difficult. After a 3 day break, when the stocks stalled, we are back to early cycle strength and some commodity weakness. Nothing lasts for more than 3 days in this era. I just don't trust a market that is led by financials or retailers... no good can come from it considering the damage that is going to be coming from Main Street in these names. On the plus side we are holding a lot of good gains; on the negative side I have a gut feel if the market begins to trend down a lot of people are going to shoot first (sell) and ask questions later. The market has eroded trust for many players with its behavior the past few quarters. So a more hedged position until we make a break one way or the other is once again appropriate.

Long Foster Wheeler in fund; no personal position