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Friday, October 16, 2009

Is This The Big One?

Those of us who live in California have to deal with earthquakes. It's not that they happen all the time, but when they do, they can get very nasty, so we have to be prepared. Geologists have been telling us for years that we are due for "the big one"; the once in a lifetime earthquake that will cause death and destruction on a Katrina-like scale. So, naturally, every time the building shakes, our first thought is, "it's the big one!". So, it seems, it is with the market. Every time the market has pulled back in the last few months, our first thought is that this is the correction we've been waiting for. We plot our price targets on our charts, and sit and wait for the next buying opportunity of the century. But so far, every "big one" turned out to be nothing but a tremor, and we sat waiting for the big dip that never came. So naturally, I am looking at this morning's plunge (thanks to BAC, who despite getting the green light from the Government to cook their books, still posted a loss) with a bit of a skeptical eye. The drop was pretty severe this morning, but unless it breaks through 1080 (and it just bounced off 1081), to me it's another in a long line of half hour corrections. XLP is the leading sector today, with the other defensive sectors a distant second, and XLF is by far the weakest sector. Oil and gold are both down, but both still above their breakout points.

There are 137 new highs so far, which, after the last few days, seems like a low number. I have one high volume breakout so far, JOEZ, which is up 37% on earnings. However, to put that into perspective, that is 37% up to $1.10. We had some stocks from the relative strength list reporting last night: AMD, down 6.5%, and TPX up 6.2%. PLCM never did report yesterday, and apparently has been rescheduled for Oct 20.

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