Links

Bespoke Investment Group takes a look at the dollar and interest rates.

Blackrock's Chief Investment Officer likes US equities.

An indicator for identifying range-bound and trending days.

Links

Investing and trading are both about waiting:

Jesse Livermore via Doug Kass on thestreet.com

Brett Steenbarger on the time between trades.

Trader's Narrative on why trading is so difficult.

GE Startles the Market; 50 sma

It's not a good sign when one of the world's leading companies misses earnings like GE did this morning. First of all, the stock carries a ton of weight in the S&P which leads to a nasty breakdown in the broad market. Also, GE is seen as a sort of bellweather for the economy since it is such a diversified and large company.

GE's really getting punished right now and the major averages are already down over a percentage point. This is not the sort of catalyst that will help us break out from this range! Now instead, the S&P and Nazz are hovering above their 50 smas threatening to break down. At this point, the market's pretty dangerous. Thus, it's not a good idea to be caught too long.

USB, USO

USB should be bought anytime it comes down to 30. Buffet buyers continually buy at that level pushing it back up to 33ish each time. The same type action occurred in BNI before it broke out.

USO is in consolidation. It could break out from here or could continue in its current range. If it gets down to 80 bucks I'd buy it and stop out beneath the 50 sma. If it breaks higher, buy and stop below the breakout.

Another Positive Sign

Taken from Rev Shark (See Links on the Right):

"Meanwhile, the most notable aspect to the trading session was the continued action in many smaller stocks. We mentioned yesterday that there were a few pockets of activity, which suggests an increased level of confidence and a willingness to take on additional risk. It’s been quite some time that we’ve seen this many individual stocks break out, and we’re sure that many active market participants are pleased to see some speculative action."

Important Link

Quant Edges outlines a possible change in the market's character.

Turning Bullish (Intermediate Term)

Everything depends on the direction of the breakout/breakdown of this consolidation range, but I'm leaning toward an eventual bullish resolution based on the following three ideas:

1) The JPM/Fed bailout of Bear has put a floor beneath financials
2) Support has proved to be solid at 1275 on the S&P
3) Bad News Good Action (Negativity is Overdone in the Near Term)

I'm a bit hesitant about hopping in head first to the S&P. Two days up in a row means that the upside is limited. Keep in mind resistance is still right above here at 1385-90ish. The action at that level will be very telling.