Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
The environment has become much more harsh the past few weeks after a placid start to 2012. I’ve posted a chart of the S&P 500 below using candlesticks rather than the normal high low chart I use to demonstrate it. Notice how much longer the bars are and how they are flipping from red to green black in rapid fashion. This market is doing a good job of whipsawing everyone.
Not much has changed from yesterday’s set up, except we are now at the top end of the recent range rather than the bottom, and yesterday we recaptured a bunch of 50 day moving averages on the indexes. The same ones that were lost, and regained, and lost, and regained numerous times the past week. So cannot take much stock in that as we’d normally do. We can still wonder if this is the basing pattern of a bear flag.
In reviewing the big winners of yesterday’s move up, many were in the laggard groups (materials, industrials stood out) but again we can always have a bullish take and ask if that is the beginning of a rotation to newer groups (much needed)… or if it was just vicious dead cat bounce action.
The one thing that has returned (quickly) is the market’s love of all things Apple (AAPL) and with the propensity for market players to drive up stocks into their earnings report (for reasons that escape me) I suppose the question is how far to they take Apple before next week’s earnings. If the Apple train continues, we’re back to the environment that we’ve seen in most of 2012 where NASDAQ is the leader.
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
