August 6, 2008
This was an important day for the markets. After yesterday’s huge 3% rally, the indices managed to fight off the efforts of the bears to drive stocks lower, and instead, actually finish in the green across the board. The Nasdaq, which broke out of its trading range actually put on another 1.2% today.
A couple of things should be realized in this market environment: 1) the bears have lost its grip and are now looking for ways to get out of their current positions, which is causing the markets to go even higher as they cover their positions, and 2) the bulls are now feeling confident that the market seems to have finally put in a bottom, allowing investors to feel confident about putting some capital to work.
As far as our portfolio goes, we put on a couple of initial positions to the long side, and those short positions that we still have, we are going to tighten the stops on.
Here’s the Nasdaq and S&P Charts…