Updated with a July 1st, 2008 post:

Just when it looked like we were heading for a short recovery, some indices closed in the negatives today. I’m still more neutral than bearish at the moment and still wouldn’t write off an up-day for tomorrow. We are in oversold territory right now and this usually means one of two things-a major break down or a bounce up. I no longer have any short positions so I’m betting on a bounce. There is also a bullish divergence on the MACD and a falling wedge has been formed in the S&P as indicated in my previous post. It is normal to see buying at the beginning of the month and quarter. I will be on the look out for large volume to move into the NASDAQ as institutions start to move their money from commodities to buy technology. It is possible that we move lower Tuesday morning but a big short cover rally should be expected by noon. Anyways, enough about the overall markets. I made a post about CNEH yesterday, and it did in fact trigger.

It closed at $5.34 from its previous close at $4.65…that is a 69 cent break out, a significant one for a small cap stock. So I hope some of you profited from this because I sure didn’t! I did put in a fairly large order on the weekend but my order was for $4.70. It opened at $4.75 today so my buy order was not processed. I did write in my previous post that OTCBB executions are slower, so setting the buy order so low was a costly mistake. On a more positive note, I’m having a very profitable month. According to newsday.com this June has been Dow`s worst June since the Great Depression so if your account is up this month, you should feel very good about your trading. Anyways, not much has changed in the markets since my last post, so if you haven’t read it you can find it here

July 1st, 2008 update:

First I’d like to wish all my Canadian readers a happy Canada day Anyways, here’s a recap of what happened today. Yesterday I wrote…

“It is possible that we move lower Tuesday morning but a big short cover rally should be expected by noon.”

I was a bit worried this morning because we moved much lower than I expected but we ended the day with a hammer candlestick. Hammer candlesticks form when a security or index moves significantly lower after the open, but rallies to close well above the intraday low.

I was expecting a move like this as early as Monday but Tuesday is fine with me too. I’m looking forward to some continuation of this relief rally before the next leg down. Good luck, and be safe in the markets…set tight stop losses and don’t be too greedy.

Richard
richard[at]hedgeagainstspeculation.com