The markets opened strong and traded higher for the better part of the day, closing at the top of the day’s range, a very bullish sign indeed. Congratulations for those of you who have been in for most of this run that started back in January. In the Jan 9th edition of the Stock Market Watch I pointed out support levels the could provide a strong foothold for the SPY. This footage is archived under the Stock Market Watch link at www.stockmarketplan.com . The support trend line I drew then is now merging with the 50 day moving average. One thing still holds true though, volume patterns have been very noncooperative. I like to see the amount of shares traded increase as any market puts in a new advance. This tells me that the big money hedge funds are participating in a move and I want to ride their coat tails because they move markets in a great way but I have always said to myself to put price action before anything else when valuing a move.

In order for this market to be a long lasting bull though, I feel it needs to digest some gains and hold, especially as it surges on to higher ground. I have always noticed markets don’t just go straight up. So for those who still have a large position in cash like me, you will get your chance to average down in to stocks as this market tests former resistance levels that can and hopefully will become support. I think the 10 day moving average at 137.48 and the 50 day moving average at 134.21 will be the first true tests that the SPY will see. The last thing I want to do now is go chasing this price move with two hands. The market will retest and that will be my opportunity to load up again. Until then, I remain patient as I follow my discipline.

I am now waiting for the spy to pull back to the ten day moving average and at that point i will probably start averaging back into equities. I did this in a small way back on 03/06/12, buying a light 15 percent stake in SPY making my stock allocation a 15 % total and the rest in cash.

Thank you for visiting, good luck, and I welcome all comments.

-Marvin

Can Research In Motion (RIMM) survive?

The Canadian manufacturer of blackberry handheld devices has really been battered by the competition in a very strong group. Revenues have really taken a beating in the last five quarters and show no sign of stabilization.

I often talk about how easy it is to spot weakness in a given sector or industry group. The telecommunications — consumer products group has been one of the top performing spaces in the market for the better part of a year and a half to two years. So I ask you, what is RIMMs problem and more importantly can they survive?

I can tell you this. Don’t be surprised to hear lots of news coming from this company as they exhaust all options in trying to find a buyer. The rubber is finally meeting the road and the street has taken notice. Look for major moves from the board. I think unless the company takes some off-the-wall measures, it will be very hard to save it.

Marvin Gil

Consolidation patterns continue for the overall market indices today as the volume also quieted down.

Volatility in the stock market is starting to slow. Market consolidations can be very healthy for the market and new leadership can arise.

I now anxiously await for a confirmation day. A confirmation day is simply a session where the overall averages climb well in excess of 2% on very high relative volume. Until then my position remains cash with no exposure to US stock market.

Stock market fakes continue.  Just when I thought the S & P was showing signs of new life, it gave up gains, forcing me back to cash.  The value is in the small stake that I took versus conventional wisdom of loading up on stocks on the first signs of a rally.  I always give myself a chance to be wrong.    This market is still in bear mode and it is making it very difficult for stock investors to have an edge.  There is no edge out there right now.

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Stock Market Watch for 6-28-2011

The S&P 500 is now stuck in a trading range between 1300 and 1265. I am now looking for the market to push through and close above that 1300 resistance level before establishing any new positions . Again I am paying close attention to volume as it has been dismal these last couple of days. I have been allocated in cash for most of the past month and that has worked out well as the market finds itself in and out of mini bounces and corrections. Any close below the 200 day moving average will not be a good sign for the bulls. As you know, I have been calling this level, the last line of defense.