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Trend Remains Intact, but Pockets of Weakness

Scott Redler
Mar 2, 2012, 5:06 PM

The market fell slightly Friday, but nothing to cause any concern for bulls who have lived a charmed existence in 2012. The Dow dropped only 0.02% while the Nasdaq fell 0.43%. The steep uptrend remains intact, with the S&P above the 10-day moving average. Wednesday we saw some more aggressive selling, but the market rebounded the following day to put to rest any suggestion of an imminent correction.

Oil will continue to be a focal point over the next few months. President Obama and Israeli Prime Minister Benjamin Netanyahu are set for talks over how to handle the Iran situation. The Middle Easter country is refusing to allow international inspectors into its nuclear facilities, and the threat of a nuclear weapon grows more likely by the day. The US prefers to stay the course with a more diplomatic approach, while Israel seems to prefer more aggressive action. Oil actually fell today as fears over a pipeline explosion in Saudi Arabia subsided. 

Gold will also be on traders' radars over the coming weeks after Wednesday's massive sell-off. The commodity has been stagnant over the past two sessions, and it will be interesting to see which way the next move takes place.

While the trend remains intact in the S&P, there are some warning signs out there about possible weakness on the horizon. The semiconductor ETF (SMH) is weak, rolling down a bit under the 10/20day moving average. The Russell 2000 ETF (IWM) has been weak, breaking the upper range. It is now also under both the 10/20day moving average curling lower.

Short term momentum/swing traders can do less here. Macro investors sit tight, as we should have much higher prices this year. Know your time frame and risk.

*DISCLOSURES: Scott Redler is long SPY, OIH, IBM, LNKD, GS, MS, ZNGA, SIMG. Short DIA, QQQ. Long AMZN puts.

Last Updated ( Friday, 02 March 2012 17:57 )