Market action for week ending July 15

Interesting action this week in the stock market.  We had a 'nice' pullback as you know most of the week, but the indices held up at the 50 day moving average which was expected.  Friday was a strong day for the bulls, as the day progressively gained all day ... Just a nice rise in prices all day.

I went about 25% long on friday before the market open, as I saw some strength at the end of the day thursday.  By the end of the day, I was up roughly 2%, but that can easily be wiped out next week, so I'm certainly not calling it a successful trade as of yet.  Regardless it was nice to see my analysis showing the weakness from the week was fading and underlying strength was coming in.  With that said, this particular bet is most likely a short term one ... Possibly as little as 3 days especially if the marks starts breaking down again.

I'm still long on gdx (gold miner's etf), which I purchased about 3 weeks ago to hedge the general market's overbought status.  Up about 13% on that at the moment and holding it for now until I see a signal change.

In my opinion, we are at a stalemate right now, with the bears having a slight edge.  The coming week will be interesting to watch, to see which side asserts control.  I am guessing that whichever side 'wins', we should see a strong move in the coming month. 

I'm comfortable having over 50% on the sidelines (in cash) waiting to see which side will actually take over.

If you have any questions that I can answer, I am happy to!  There is no such thing as a dumb question!

Hope your weekend is great!!

a top ??

Another stellar day.  Market can't keep going like this forever.  In fact, today might be the top, time will tell, but I'm a bit skeptical of this move.

Especially on the QQQ's ...

My analysis that people are referencing, actually showed a downward thrust for 5-9 days, then back up after 9 days with most occurrences up for the next 6 weeks.

With that said, I personally am rather bearish and have most of my dough on the sidelines right now.

The way I look at it, we have 1 of 2 occurrences ... We either sit more or less still for a few days for the market to build a base and absorb the fast movement that we had ... Maybe down by 1-2 percent at most, and more or less stable ... Or ... We fall hard.

I don't see a huge upthrust without a consolidation first.

How Overbought is it?

Last week the market had the best week in over two years, rising 6% for the week.  My daily market analysis was quoted today by David Steckler in his market blog ... Dave is retired now, but spent 20+ years as a Financial Advisor and was a member and past president of the American Association of Professional Technical Analysts (AAPTA), and a member of the Market Technicians Association (MTA).

I sent a cautionary post on Friday (7/1/2011) that the market will likely decline from here instead of continuing to rise, which he paraphrased in his post, "How Overbought is it?"

a few other blogs referencing a study I performed

Over the weekend I created an extensive study on the state of the stock market and how 'overbought' it currently is.  The study is getting some attention among larger investors and 'market makers', and a few have asked to share the results with their 'people' which is exciting to see.

Overbought is exactly how it sounds ... a term that is used to indicate that a stock (or entire market) is 'over bought' and therefore apt to decline since in an overbought condition, there are fewer buyers than sellers.  After a healthy rise in the market, at a certain point it becomes overbought and we usually experience a decline or sideways movement.  Sometimes the decline is small, and other times it isn't.

In any case, I wanted to share the first two blogs that were 'published'.  I'm told there should be two more newsletters sent out tonight and 3-4 more in the coming days.
http://www.etfroundup.com/?p=6782
http://doctheta.com/vbforums/content.php?216-Warning-warning!

This first blog is run by a very well respected investment advisor who was the past president and currently a member of the American Association of Professional Technical Analysts.  His blog is following by literally thousands of influentials in the market.  his work is very technically focused, so you might not understand much of it, but I am happy to decipher it for you if you wish.

Anyway ... Very boring I'm sure, but wanted to share it with you nonetheless.  I hope I don't waste too much of your time