Pimp My Trade

May 8 Market Wrap

Posted on May 8, 2009 by Adam

The marekt was up today. Who cares? The big story is the comeback of A-ROD! He’s going to swing the Yankees out of their recent slump, even without his juice.

As for the markets, I think you can tell how they reacted to the stress test news. Buyers were extremely aggressive all day. Tick readings were consistently positive, on many occassions reaching above 1000, which is evidence of broad-based buying.

You can chart tick readings with the ticker symbol $TICK, which measures the ratio of advancing stocks to declining stocks. It’s centered around zero. I consider readings above 500 to be extremely bullish and below -500 to be extremely bearish. (I had a picture but my computer’s being a jerk).

The rally excluded tech for the most part. The Nasdaq rose only 1.33% compared with over 2% in the S&P. That’s a bad thing for stocks. On the other hand, the banks and energy led the charge higher, which is good. I almost took a bullish position in Apple, but hesitated just in case this is not just a quick pullback in tech.

The market is getting extremely overbought. Watch out for a pullback next week, especially if we run up and touch 835 in the S&P.

"The sheer size of my muscles will carry stocks higher"