Dec 29 BuyList/Market Recap

drip drip drip chop chop chop not much action going on today. Stocks ended a sloppy session higher today, with the Dow, S&P 500 and Nasdaq managing fresh 2009 highs on some semi-hoopla about a recovery in retail sales. Stocks have risen for the last 6 days rising to levels we havent seen since the good ole George W Bush days!!

I always refer to these days during hanukkah to New years as the “shit carnival” all the rebalancing and tax loss selling nails a lot of the under 5 dollar stocks but then the craft scalpers come in and bid them back up. Due to the low volume you can actually have some good volatility in these stocks as there are not too many buyers or sellers to keep things orderly. Even without any real action the Good folks at BOWS# were still in safe hands due to frothy action in $nep and $synm. The Boom Factory was jumping today with big trades on $ahd short, $srz long (gracias urban_ryno) , and numerous other trades that all went from 5-20%.

As you can see the market is very overbought (anything over stoc 90) we are due for a small pullback. Ideally we get a pullback to the breakout spot..have a nice retest (work off the overbought situation) and bounce from there.

2 sectors Im liking right now are tech and oil. But both are very overbought. Typically when we hit extreme readings I wont swingtrade any of these type of stocks. I will shorten my timeframe and trade breakouts. That way if market pullsback my losses are minimal.

As always when market is overbought I raise large amounts of cash. Right now Im about 60% cash 20% short and 20% long.

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a few of the tech names I like

$trid

$simg

a little bit more consolidation in this and it will be ready to go. I think this is one of the hot tech stocks of 2010. Great volume pattern. This stock has a good chance to run to 3s.