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Will We See a Year-End Run?


Doom and gloom sure are present and the only thing going for the markets at this point is seasonality.


Good morning, Minyans,

Despite what looks like a positive start to the day, cash remains king and continues to be my mantra here.

From my perch, frustration levels are getting awfully high and I am very curious if this will lead to a strong bounce in the very near future. Doom and gloom sure are present and the only thing going for the markets at this point is seasonality. I don't normally poll traders, but if you were to ask 10, I suspect the results may be pretty even as to their thoughts on a year-end run. However, I suspect that only one or at the most two are actually positioning for it, which tells me that if we do see some hint of any strength, the fire power is definitely on the sidelines to take us higher. I continue to watch for individual chart setups that offer the best risk reward. There aren't many, but there are a few and should they start to perk up and follow through, I may join in the action:

  • Solars are high on my list and my current favorite is second tier player Evergreen Solar (ESLR). The first tier players, including First Solar (FSLR), Sun Power (SPWR) and Suntech (STP) are quite extended, but one I would lump into that group that is not as out of reach is Memc Electronic (WFR). I am watching for the break out of $70 to hold and will consider picking some up should the pattern improve.

  • Advanced Analogic (AATI) has held well since flirting with a terrible breakdown earlier this week. The valuation here is still very attractive to me and I am watching for a move into the mid $11.00 area to start a position.

  • Bally Technologies (BYI) is starting to tempt me on the dark side despite still being in a strong uptrend. I see hints of distribution on the chart recently and a failed break to boot. If the stock pushes through yesterday's low of $38.98 I will short this stock with a stop over yesterday's high of $39.87.

Unless you feel comfortable shorting it is a time to sit in cash, Minyans. Wait out the action and if we do see a move higher into year end, it will last longer than one day and give us plenty of time to play.

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Position in ESLR.

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