TCM Notes : 6/26/09

• 2% moves on the indices accompanied with volume caught many a trader flat footed today. Many say it was end of the quarter window dressing taking place due to the trades settling 3 days after Thursday. Traders in the SP500 pit claimed program buying was gunning for the buy stops all day (hat tip Najarians.) Regardless of the exact cause everyone except the Dow reclaimed both their 50 and 200dma. The Dow took back it's 50 but left the 200dma for another session. So the range of 880 to 950s still seems to be with us. I'll need to see the 9dma retake the 20dma back to the upside to really stamp my hooves on the ground. Although the SP500's move Thursday took back the 9,20,50, and 200 day moving averages. Pretty impressive. So far the 23.6% retracement is providing major support.
• OCN saw volume pick up and a push back to it's highs. When they report this thing is going to move in excess of 10%. With the chop in the market it could still fall back to it's 50dma, but the risk of being out of the stock is far outweighing the risk of being in at the moment. OCN is in an uptrend that is now catching the fancy of several fund managers. This could persist another 12 months potentially resulting in a double.
• I'm hesitant on the DBA call after spotting a very bearish pattern that somehow I missed. The sessions from 6/1 and 6/2 are what is known as a "gap island reversal." This is when you gap up away from the market, and either in the same session or the next one gap back down. It leaves these days out there as an island unto themselves. Just know the market usually moves the opposite direction with authority. Further confirmation of this came on high volume gap down on 6/15. So the recent trade off the hammer low may not hold even though it came at a strong moving average support level. The softs need to prove themselves to me ie: Corn, Soybeans, Wheat, and Sugar.
• IPOs have seen impressive debuts this year. Moreover they've enjoyed continued gains after their first day of trading. CYOU, SWI, MJN, OPEN, and RST have been powerful. New comers DGW, and CPC came public Thursday and offer China exposure. Two that I would like to look at further are GOV, and CYS.
• I had a level of 56.70 on SDS I was looking at for entry Thursday. It was a trend line from it's most recent hammer low. That trend line got smashed eliminating the trade. I wouldn't be surprised though if we get a bit of a pullback today near the close. If I knew for certain I'd be at the beach!