Is the rally over? Market overview for April 14

Well, Goldman Sachs (GS) reported record earnings yesterday and the market sold off on the news - the stock was down almost $15 today. The economic news from this morning (PPI and retail sales) were not very good and provided the excuse needed for taking some profits in a very overbought market.

Ironically, my two signals for today were longs on the ES (SPY), taken via short in SDS. I was able to scalp 50c for half on the first trade, then stopped out at entry. I also shorted SDS when SPY failed to go below Thursday's low, and that was also good for 50c in a wacky last hour of trading. I also piggybacked on Todd Stottlemyre's call on BTU which was good for at least $1 - this is not something I usually do, but BTU used to be one of my favorite stocks last year and is one of the better coal plays. This happens to be one of the reasons I decided to end my boycott of StockTwits - lot's of good ideas that are generated during the day.

I am including a 60 minute chart of ES mini. It can be seen on the chart at around March 11, there was a bullish MA crossover of the 20MA and 50MA. This is usually a good indicator on market trend and is still intact. So, one really must be looking to buy on pullbacks, until proven otherwise. The hourly chart is showing a bullish stochastic buy (which is yet to trigger).

My good friend on Twitter, fortune8, has an interesting post on his blog, about this rally. Have we missed this rally? In hindsight, and if you are one to buy and hold for more than one day, then you have missed a big part of this rally. But one cannot give up just because the market has run without us. I believe the psychology of the market has changed for now, and everyone seems to be chasing strength and buying the pullbacks. Momentum and breakout trades seem to be working again, and all we can do as traders is trade what we see. It sure feels like it is easier to put on a long trade than short (quite the opposite of a few months ago).

And remember that for all the moves that have happened recently, we are still only back to where we were in early February. Have all our problems been fixed? Is the worst behind us? I have NO idea - and I cannot claim that I know. But I do know this - I will take ALL my buy and sell signals on an intraday basis, and now I am looking for pullbacks to start swing long trading again.

Good luck with your trading.