Flat Day - What's New?

After much pushing and pulling from both sides, we once again saw the Dow close pretty much flat today. That is now two days consecutive of very dull, low volume trading. It is obvious nerves are settling in for many investors as they've all gone away. Even the day traders are gone! It kind of feels like we are stuck watching a soundless movie from the 40's, right after we watched Lord of the Rings in high definition. At any rate, I'm not expecting to make big money on days like today.

One thing to watch for that has caught my eye, is the moving of the VIX. Even though the VIX has been dragging as of late, if you look at the regression line formed by the recent bottoms since the beginning of 2007, it is currently settling almost perfectly in line with the regression, suggesting that we may be at the bottom for the VIX. I wouldn't trade solely based on this criteria, but with the other technical signals, it's definitely significant and worth noting.

Oil reached $70 per barrel today for the first time in 2009. This means more money down the drain for you and I into our gas tanks and less into consumer spending. On top of that, unfortunately, most of those profits benefit companies outside of the US, so it's almost a lose, lose for us, unless of course you are invested in oil. At any rate, like I've said before, I believe Oil has hit its temporary peak and should settle somewhere between $60 to $70 per barrel by the end of the year. We saw this coming and talked about it in January.

Retail sales come out Thursday, which I would assume after that credit spending report we got, can't be all that good. Although, analysts have once again done a great job of low balling the number, so who knows how the market will react. We are expecting a minor uptick, which I actually would still be surprised to see. I may see some opportunity to short some department stores tomorrow. I'll keep you posted. Happy Trading

3 comments:

  1. Anonymous Says:

    Based on your past experience, does low volume and non-moving market leads to major sell-off or provides confidence for buyer?

    I know it can go either way, but just want to check if you have something specific in mind.

  2. Finance Fanatic Says:

    Anon, Low volume usually is a cause of uncertainty, which is usually in favor of bears. This is not always the case, but I believe in our current case, the uncertainty will eventually lead to some downward momentum, that's if bears get their courage back.

  3. Silvia Brein Says:

    I remember now those times. As almost 6 years passed, my husband has peace now with it. As they predicted at essaykings.me the price is just as they told.