Sam Collins

A Strategy for a Confounding Market

by Sam Collins   06/25/09

For my take on what is happening with the S&P 500, see my Chart of the Day.

Yesterday, the Dow fell, and the S&P 500 and Nasdaq rose. Volume was very low again. Conclusion: The near-term downtrend is intact, but the action of the 500 and Nasdaq might be telling us that a move to the top of the trading zone at 930 is about to occur, giving sellers another opportunity to lighten up or take on new short positions.

So, until this pattern is resolved, the strategy is to sell at S&P 920 to 930, or sell on a breakdown close under S&P 880.

Today's Trading Landscape

Earnings to be reported include: Accenture, Arcadia Resources, Christopher & Banks, ConAgra Foods, Finish Line, Flow International, Jackson Hewitt Tax Service, Lennar Corp., McCormick & Co., Micron Technology, Palm, Rand Logistics, Robbins & Myers, SMSC, Spectrum Control and Tibco Software.

Economic reports due: Q1 final GDP, initial jobless claims for the week of June 20 (the consensus expects +2,000), and June 1 EIA natural gas inventories.

Late news: Fed Chairman Ben Bernanke appears before Congress today, and may face some questions about the role of the Fed in the takeover of Merrill Lynch (MER) by Bank of America (BAC).

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Sam Collins is a registered, fee-based portfolio manager who may be contacted at samailc@cox.net. You can also check out an archive of his most recent market outlooks.