BROWSING CHARTS

There's really no better way to get a feel for the market then browsing through charts. I try to look at several hundred a night. I just took a quick browsing break and noticed something that may be relevant.

First of all we know that the market acts like a pendulum, it swings too far one way and then too far the other. Secondly today is options expiration, there's a chance that a price level is being pinned, if I had to guess, I'd say $129 on the SPY-$129/$130 have heavy open interest. Finally, as I noted at the start of this bounce, "it's likely to be scary on the upside move", that's a big part of why we see these violent bounces; to shake out traders and get better positioning for the next move down.

Looking at the SPY today, here's what we have...

 Some decent looking 3C action has developed into the afternoon, but still not a major threat to $129.

A bit longer on the 5 min chart, it's starting to enter the distribution cycle. The 10-15 minute charts aren't there yet and 15 minute is where reversals most commonly occur when the negative divergence shows up there.

Taking all of that into account, I looked at probably a couple hundred of charts and noticed, while many don't look good (and I'll be compiling a list and charts for some of those this weekend for next week), there are some heavy hitters or bellwethers that just aren't showing the kind of distributive action I'd expect to see before a reversal. Here's a list of some of them as I started writing them down after noticing how many of the bigger stocks weren't deep into distribution.

I'm not saying I think these are buys, I'm just getting across the point that if we were very close to a reversal (like today), I'd expect these to look a lot worse and many still look good, meaning they are not deep into the distribution cycle.


INTC
F
MCD
RIMM
ADM
GOOG
ORCL
DELL
C
GS
IBM
COST
JCP
BEN
YHOO
WMT
GE
AMZN
DD

As you can see, they are important stocks and a pretty good cross section of the market.

So the point, news still rules, but I am of the opinion that today's action has more to do with options expiration and there's still room for that "scary" move up.

Also understand we are talking about very short term action here, the bounce, not the intermediate or long term outlook which is significantly damaged.