With the Dow down over 200 points at times today, it looked like the industrials were going slice through their 1-year trend line. But thanks to the PPT and co., the Dow and the rest of the indices rallied going into the close. Looking at the Dow over the past year, there was a similar instance in August when the Dow punctured the same trend line, only to rebound and close above it. The markets were off to the races from there, and it is certainly possible that were are in for a bit of a bounce here.
If the market does rally, I'm looking for a bounce in the financials and real estate. Both IYR and XLF closed below their lower bollinger bands yesterday, but closed above them today. In the past, bounces have tended to follow such instances.
Of the financials, I like JPM or WFC. They have been less weak than the rest of the money center banks over the past month.
They also display the same positive characteristics as XLF and IYR. Here is a chart of WFC:
Finally, BXP seems poised for a bounce. It sits at a support level and also crossed above its lower bollinger band today:
I am holding EGY going into earnings on Monday. Hopefully management will have something good to say. I also went short NEM today at 55.25 to cover my ass from any more market downside. That trade has worked out pretty well so far. I can't say the same for EGY, though.We'll see what tomorrow has in store.
Tonight's Bets:
New England Revolution (1.90)
Detroit Pistons(-1)
