Monday, June 8, 2009

Trend Reversal?

Some are saying that we had a trend reversal on Friday because the "better than expected" jobs number should have sent the market much higher. I think at best this rally is overdone. I sold a call spread on COF and have been burned but have 2 weeks to see it turn around if the stock gets below $22.50. I am curious to see how today pans out. If we roll lower, I will be ready to get short---I have my list ready. The German DAX futures are hovering right at the 5000 level (4998.5 at the time of this writing). I would like to see it fall below 4970 to confirm my short bias.

McDonalds sales are up 5.1% for the month of May--but the stock is trading lower as it sees potentially a 20% drop in earnings according to a report this morning.

Keep an eye on the Dollar, Oil, and Natural Gas as well. If the market pulls back very far--it will be key to asses whether the commodities get cheaper and the dollar stabilizes. It will be a very scary scenario if the commodities continue higher as the market falls.

I don't like to trade as much on Mondays, so I will be content to sit on the sidelines and get ready for tomorrow. If we break key levels, I will make some trades on SDS.
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