So near and yet so far

• Posted by vinaydh
• on December 23rd, 2009

The SPX 1120 was breached intraday but the market closed below it. I think it’s only a matter of time before market overcomes the 1120 level. But then I have been saying this for quite some time but I could care less. This market is providing good trading opportunities in individual stocks.

The next level of resistance once 1120 is cleared is around 1160. Chinese names such as BIDU, CTRP are showing relative weakness but big cap stocks such as AAPL, AMZN and GOOG are showing strength. In fact GOOG didn’t show weakness even when the market was weak last week. It closed above 600 and the next serious resistance is around 640. The euphoria around RIMM earnings has vanished. I wouldn’t touch it on the long side unless it closes above 71.6.

As I said in the previous post, I am bullish in the short term but apprehensive about the market in the beginning of 2010. I am not sure if the divergences in some of the technical indicators and this low volume lately will lead to a melt down or the strength in indicators such as A/D readings etc. will lead to a melt up. In short I would be out of the market when 2010 starts rather than get caught leaning on the wrong side.

P.S. I used the wrong words melt up and melt down. What I meant was some kind of sell off or continuation of rally. I also think that any sell off, if it materializes, in the beginning of the year will be an opportunity to go long.

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