That bounce was short lived.  Oh well, it’s better to be sitting on cash and missing a strong move, rather than being in positions going the wrong way.  It’s always tough to watch huge moves that you aren’t participating in, but patience really is the key.  I’ll keep waiting for a better short entry point since I really think this market is getting oversold.

The volume picked up today as the market ended fairly bullishly after a weak open.  The volume numbers confirm that there was more up volume than down today, giving some hint that we’re on a bounce now.  We’ll see how far it can take us heading into the holiday weekend.

Sometimes you hit the bottom of a channel and the market just flattens out, rather than actually bouncing off.  There may still be a strong bounce in the near future, but this bottoming is different than the previous times this year, which only briefly flirted intraday with this lower region before experiencing strong support.  More weakness and I’m liable to start believing we’ll actually break through this time.

Bad news all around sent the market plunging in what turned out to be an amazing day for the bears.  Without any pauses or bounces, the market opened lower and marched steadily downwards the entire day.  The market is starting to hit that oversold level again, so expect a bounce sooner rather than later.   The general trend will likely continue downwards though.

The fed left the rate untouched as they acknowledged the problems of both slow economic growth and rising inflation.  The usual volatility occurred after the announcement with the S&P 500 settling just below the pre-announcement price to end the day.  Expect a rough summer while the stagflation issues keep popping up and prevent any major bullish runs.  There seem to be enough buyers to maintain the current support line for now though.

Coal has been another one of those hot areas that everyone’s been jumping on for the past year.  ACI has been going crazy, but ANR has been even crazier.  This is just one to throw on the watch list since the bubble will eventually pop and it’ll have a long way to go before it’s fairly valued again.

A spinning top before the rate decision isn’t surprising.  We’ll see if the fed can break the market out of its current channel tomorrow.

After opening higher, the market settled back in to an almost even close.  The consensus is growing even stronger for no rate change on Wednesday, so we’ll see if that holds true and how much the wording to support the decision affects the market.

Even the stock market can’t avoid Newton’s First Law.  The downward momentum continued as credit and oil worries played prominent roles in the news again.  The fed decision is just about upon us and it will be interesting to see when they’ll start raising rates again.  After a fresh wave of poor reports across the financial industries, traders increased the odds from 78% a week ago to 92% today that the Fed will leave the rate at its current 2 percent.  Of course the line on the fed rate slides faster than the line on a college football game, so keep a watchful eye when the news comes out next Wednesday.

Faithful readers know that I normally avoid trading ahead of big news days and this one is no exception.  I’ll probably leave the new system sitting on 100% cash most of next week since it hasn’t been tested on fed meeting days at all yet.  I could probably try to train the model on just fed meeting days, but it doesn’t hurt to skip a day since the trader only sees action half the days it’s running anyway.  Expect next week to foreshadow the direction the market will take over the summer.

More banking weakness and oil worries sunk the market again.  I was getting tired of drawing the same channel, so even though it still exists I went back to drawing the other line that’s been significant over the year.  Combining the two makes you realize how strong the resistance in the 137.5 to 140 range is, so I wouldn’t count on the market surging above that any time soon.  We’re starting to close in on the fed meeting so look for that to start weighing on the markets.