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Stock Market Bullish Bias Continues

Stock-Markets / Stock Index Trading Sep 16, 2009 - 07:51 AM GMT

By: Mark_McMillan

Stock-Markets

Tuesday's market action saw volume increase on the NYSE as all of the major indexes put in new closing highs for 2009. The Dow led the other major indexes and was echoed by the Russell-2000 and the Semiconductor Index (SOX).


The TLT (Lehman 20-year Bond fund) slid quite a bit lower but never really broke the bullish uptrend it has been in. The Bollinger Bands are narrowing so it is possible the uptrend will be contained and a real battle could get started. If that is the case, we will try to take advantage of that with a trade (bullish or bearish, we don't care).

Trade Recommendations:
We weren't filled on our option contract sales on Tuesday so we will be patient here as we wait for the opportunity to enter a high probability trade.

Daily Trend Indications:

- Positions indicated as Green are Long positions and those indicated as Red are short positions.
- The State of the Market is used to determine how you should trade. A trending market can ignore support and resistance levels and maintain its direction longer than most traders think it will.
- The BIAS is used to determine how aggressive or defensive you should be with a position. If the BIAS is Bullish but the market is in a Trading state, you might enter a short trade to take advantage of a reversal off of resistance. The BIAS tells you to exit that trade on "weaker" signals than you might otherwise trade on as the market is predisposed to move in the direction of BIAS.
- The Moving Averages are noted as they are important signposts used by the Chartists community in determining the relative health of the markets.

Commentary:
The Dow moved back into an uptrend state leaving the S&P-500 and SMH in trading states. All the indexes we have been monitoring still have a bullish BIAS. We don't like the action in the Semiconductor Holders (SMH) as they aren't correlating well with the other indexes and not even with the Semiconductor Index. Still, if we see an opportunity to profit from a reversal of a light volume pullback, we will likely enter a trade in the SMH in the near future.

We will stay with this trade until we an opportunity to trade a reversal, even if it is a short one.

We hope you have enjoyed this edition of the McMillan portfolio. You may send comments to mark@stockbarometer.com.

If you are receiving these alerts on a free trial, you have access to all of our previous articles and recommendations by clicking here. If you do not recall your username and/or password, please email us at customersupport@stockbarometer.com.

By Mark McMillan

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2009 Copyright Mark McMillan - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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