Keep on Truckin

Posted by downtowntrader | 9/26/2006 09:23:00 PM | 0 comments »

Well, we hit a new multi year high on the SP500 and we are close to a new all time high on the Dow. While everyone worries about how long this will last, stocks keep on going higher. There are two things that will be interesting in the coming days. First, everywhere I look it is being reported that this weeks move is attributed to window dressing. If that is the case, I would expect a reversal before Friday to chop out a bunch of people. Second, there are probably too many pessimistic people out there to end this rally, but you can be sure that once market participants start thinking they are out of the woods, then it will be too late.

Commodities started to bounce as I mentioned last night, and there may be some good short covering in these sectors. These moves, especially in the Oil sector, should be reserved for the most nimble traders. I am sticking to metals for now as they have more divergences on the charts.

Here are a couple of charts to watch.

DXPE has given back all of the gains from its recent stellar earnings report, but is at major gap support. It had a very strong move today and may be bottoming out. I imagine that it will pull back in the coming week to retest the breakout, and may give a better entry for those that missed.
ASEI is one of my holdings that may be ready to make another leg up after hugging the 9ema the past few days.

Here are a few links worth checking out.

Highchartpatterns has had two pretty good posts the past couple of days here and here. I like reading about other traders thought processes and how they approach different aspects of trading .

Also, Ugly has another great video out. Just awesome.

Good Luck,