As was mentioned in the last post, I will not be able to make daily reports for at least the next two months. Not reporting as often as I had will also increase the amount of information I have to pull from. So my reports will be focused on the U.S. markets only. Sorry, if there were any international readers, but I have no idea if you are out there since I haven't gotten any comments. So until I do, it is only my opinion that counts.
U.S.
Dow => 7776.18, +496.93
Nasdaq => 1545.20, +53.94
S&P => 815.94, +4.63
Mine
AMD => 3.37, +0.05
F => 2.84, -0.04
NG => 2.68, +0.32
AMD PG => 0.28 (Sold to Close 3/24/2009), -0.18 (Total)
F PG => 0.40 (Sold to Close 3/24/2009), -0.35 (Total)
FPL DI => 5.60 (Sold to Close 3/24/2009), +3.75 (Total)
Trend Report
Friday, the U.S. markets closed down for the day, but not enough to eliminate a third bull week. This shows a continued rally of the bulls but it also puts all of the indices into their respective resistance zones marked by the levels of seven weeks ago. So what does that mean?
Meaning
First let's describe a resistance zone. A resistance zone is not a specific point or value. I would say that a safe assumption is a point value +/-5%. For example, the Dow is approaching the 8000 point level, where it stalled around for a few weeks before dropping through. So the Dow resistance zone is 8000 +/-5% (400 points), a range of 7600-8400. Currently it is in the range at 7776.18.
For the Nasdaq it is 1500 +/-5% (75 points), a range of 1425-1575. Currently it is in the range at 1545.20. For the S&P it is 800 +/-5%(40 points), a range of 760-840. Currently it is in the range at 815.94.
Lets continue. Because I am a swing trader, I use one chart interval for trend and a tighter one for timing. In this more volatile market I have been using the tighter intervals of, weekly for trend and daily for timing. The trend report above was done using the weekly chart information, so for timing I am obviously using the the daily charts. But I am also using the indicators that I mentioned several times before in my previous posts.
Timing
So on the daily chart of the Dow we have a strong, but weakening RSI of 58.19. The Stochastic is bullish, but has been overbought for over a week. And the MACD is also bullish, but the histogram is showing signs of increasing weakness.
The Nasdaq has a similar report. The RSI is strong, but weakened to 58.6. The Stochastic is bullish, but has been overbought for over a week. And the MACD is also bullish, but the histogram is also showing signs of increasing weakness.
Finally, the S&P. The RSI is strong, but weakened to 57.65. The Stochastic is bullish, but has been overbought for over a week. And the MACD is also bullish, but the histogram is also showing signs of increasing weakness.
Conclusion
All though it has not occurred as quickly as I was previously expecting, this rally is going to have a short life. I am expecting stagnation at this zone and then a pull back to the lows that were put in three weeks ago. I am also hoping that the markets will bounce from those lows and then blow through their current resistance zones. But currently the timing indicates that research into Puts and Shorts should be the daily routine. Look for your ins and prepare your outs for your Calls and Longs.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Saturday, March 28, 2009
Monday, March 23, 2009
What Happened to Today's Report?
I am guessing you maybe wondering where today's report is? Well, due to circumstances that continued from last Thursday's late report, I will no longer be able to give daily reports for the foreseeable future of 60 days.
My reports will be limited to weekly reports on Saturday and prognostication on Sunday. On occasion I may post during the week, but I don't see that happening that often. However, I do hope you choose to check anyway.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
My reports will be limited to weekly reports on Saturday and prognostication on Sunday. On occasion I may post during the week, but I don't see that happening that often. However, I do hope you choose to check anyway.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Friday, March 20, 2009
Executed Puts
As expected the bears are coming out, although a bit slower than expected.
Asia:
Nikkei => 7,945.96, -26.21, -0.33%
Hang Seng => 12,833.51, -297.41, -2.26%
Straits Times => 1,596.92, +12.06, +0.76%
Europe:
FTSE => 3,842.85, +25.92, +0.68%
DAX => 4,068.74, +25.28, +0.63%
CAC => 2,791.14, +14.15, +0.51%
U.S.:
Dow => 7,276.94, -123.86, -1.67%
Nasdaq => 1,457.27, -26.21, -1.77%
S&P => 768.49, -15.55, -1.98%
Me:
AMD => 2.67, -0.29
AMD PG => 0.46 (Bought to Open @ 0.46)
F => 2.75, +0.24
F PG => 0.65, -0.10 (Bought to Open @ 0.75)
FPL DI => 5.40, -0.26
NG => 2.36, -0.22
And I think the wise move is to go with the trend. But is it really time to go with the bears on this one? Some would say that waiting is better, just to make sure. So let me explain why I think it is time.
All the indices put in another bear day and the pass three days show a very obvious pivot. We also have the RSI declining to or below the 50 mark. Usually waiting for another bear day is recommended so that we can be sure it is a pivot and that the RSI can fall below 50, but I am rather certain about this move.
As for the indicators, for all three indices, the stochastic has leveled off at the overbought level. This gives rise to the opinion that investors are going to start selling to get their profits. We also have the MACD doing the same thing after a long uninterrupted climb. Usually solid climbs are followed by solid declines for a short period of time, but it could be longer.
So taking that set of information into consideration I looked at a few of the stocks that I like for puts. We have Advance Micro Devices (AMD) and Ford (F). AMD reflects the broad market exactly, so I am not going to explain myself on that one. However, I probably should explain myself on Ford.
Ford did pivot, but the RSI is actually still climbing and is way up at 74.58. The stochastic indicator is overbought and leveling off, but the MACD has yet to turn, although it has run up for a while. So there is no 100% certainty that Ford will go down from here on out, it is more of a 75% certainty that it will continue to decline. Probably not as forcefully as I believe AMD will, but significant enough to make a profit.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Asia:
Nikkei => 7,945.96, -26.21, -0.33%
Hang Seng => 12,833.51, -297.41, -2.26%
Straits Times => 1,596.92, +12.06, +0.76%
Europe:
FTSE => 3,842.85, +25.92, +0.68%
DAX => 4,068.74, +25.28, +0.63%
CAC => 2,791.14, +14.15, +0.51%
U.S.:
Dow => 7,276.94, -123.86, -1.67%
Nasdaq => 1,457.27, -26.21, -1.77%
S&P => 768.49, -15.55, -1.98%
Me:
AMD => 2.67, -0.29
AMD PG => 0.46 (Bought to Open @ 0.46)
F => 2.75, +0.24
F PG => 0.65, -0.10 (Bought to Open @ 0.75)
FPL DI => 5.40, -0.26
NG => 2.36, -0.22
And I think the wise move is to go with the trend. But is it really time to go with the bears on this one? Some would say that waiting is better, just to make sure. So let me explain why I think it is time.
All the indices put in another bear day and the pass three days show a very obvious pivot. We also have the RSI declining to or below the 50 mark. Usually waiting for another bear day is recommended so that we can be sure it is a pivot and that the RSI can fall below 50, but I am rather certain about this move.
As for the indicators, for all three indices, the stochastic has leveled off at the overbought level. This gives rise to the opinion that investors are going to start selling to get their profits. We also have the MACD doing the same thing after a long uninterrupted climb. Usually solid climbs are followed by solid declines for a short period of time, but it could be longer.
So taking that set of information into consideration I looked at a few of the stocks that I like for puts. We have Advance Micro Devices (AMD) and Ford (F). AMD reflects the broad market exactly, so I am not going to explain myself on that one. However, I probably should explain myself on Ford.
Ford did pivot, but the RSI is actually still climbing and is way up at 74.58. The stochastic indicator is overbought and leveling off, but the MACD has yet to turn, although it has run up for a while. So there is no 100% certainty that Ford will go down from here on out, it is more of a 75% certainty that it will continue to decline. Probably not as forcefully as I believe AMD will, but significant enough to make a profit.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Thursday, March 19, 2009
"PUT"ting to Action a Bear Strategy
As expected from my very impromptu market rap up before the market closed, the bears owned the day. (As a quick note, I am sorry for the bad grammer in that last post.) So what did we have going on and what am I doing about it?
Asia:
Nikkei => 7,945.96 , -26.20, -0.33%
Hang Seng => 13,130.91, +13.75, +0.10%
Straits Times => 1,584.86, +8.93, +0.57%
Europe:
FTSE => 3,816.93, +11.94, +0.31%
DAX => 4,043.46, +47.14 +1.18%
CAC => 2,776.99, +16.65, +0.60%
U.S.:
Dow => 7,400.80, -85.78,-1.15%
Nasdaq => 1,483.48, -7.74, -0.52%
S&P => 784.04, -10.31 -1.30%
Me:
AMD => 2.96, -0.01
F => 2.51, +0.04
FPL DI => 5.66, +1.77
NG => 8, +0.07
A profitable day for those that purchased wisely. But a day of disappointment for those that continue to expect the bulls to continue indefinitely. The market continues to poise itself for another bear move to test the most recent lows of a few weeks ago.
We have the report of the bill to steeply tax the execs that earned contracted bonuses, despite their failure to produce, was passed today. But such news didn't do enough to offset the news about additional job cuts occurring and the sale of failed IndyMac being closed with One West. Also, AIG sues Countrywide (ahem, Bank of America owns them) over the loses taken on bad loans. The fingers continue to be pointed around. So sad.
I am putting in a tight stop for my FPL DI position tomorrow to prevent any unnecessary loss of capital. I will, however, allow for all of the Covered Call positions to continue as is. I made my money on the sale of the options against the asset and will or can on the calling away of my stock or the sale of the next option.
I will also be looking for confirmation tomorrow that FPL is reversing. Today FPL put in a doji candlestick and I have been repeating that the Stochastic and MACD are nearing oversold. So I think now is a good time to plan for a put on FPL as well. Don't know the numbers now and too tired to run them. Hopefully I will have them before the market opens in the moning.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Asia:
Nikkei => 7,945.96 , -26.20, -0.33%
Hang Seng => 13,130.91, +13.75, +0.10%
Straits Times => 1,584.86, +8.93, +0.57%
Europe:
FTSE => 3,816.93, +11.94, +0.31%
DAX => 4,043.46, +47.14 +1.18%
CAC => 2,776.99, +16.65, +0.60%
U.S.:
Dow => 7,400.80, -85.78,-1.15%
Nasdaq => 1,483.48, -7.74, -0.52%
S&P => 784.04, -10.31 -1.30%
Me:
AMD => 2.96, -0.01
F => 2.51, +0.04
FPL DI => 5.66, +1.77
NG => 8, +0.07
A profitable day for those that purchased wisely. But a day of disappointment for those that continue to expect the bulls to continue indefinitely. The market continues to poise itself for another bear move to test the most recent lows of a few weeks ago.
We have the report of the bill to steeply tax the execs that earned contracted bonuses, despite their failure to produce, was passed today. But such news didn't do enough to offset the news about additional job cuts occurring and the sale of failed IndyMac being closed with One West. Also, AIG sues Countrywide (ahem, Bank of America owns them) over the loses taken on bad loans. The fingers continue to be pointed around. So sad.
I am putting in a tight stop for my FPL DI position tomorrow to prevent any unnecessary loss of capital. I will, however, allow for all of the Covered Call positions to continue as is. I made my money on the sale of the options against the asset and will or can on the calling away of my stock or the sale of the next option.
I will also be looking for confirmation tomorrow that FPL is reversing. Today FPL put in a doji candlestick and I have been repeating that the Stochastic and MACD are nearing oversold. So I think now is a good time to plan for a put on FPL as well. Don't know the numbers now and too tired to run them. Hopefully I will have them before the market opens in the moning.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Notice: Due to Circumstance...
Due to circumstances out of my control. Today's post will be rather late. But to put be to the point in case I am not able to post today.
The Asian markets were up mostly up. The European markets were all up. On carry over news from the U.S.. But the U.S. markets were not able to keep above water by 3:17pm EST.
Unless the news that the House has passed the bill to tax those AIG execs that got those bonuses really starts to get the bulls attention, it looks like it might just be a flat or negative day.
Hello Pooh and Baloo, welcome to the party.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
The Asian markets were up mostly up. The European markets were all up. On carry over news from the U.S.. But the U.S. markets were not able to keep above water by 3:17pm EST.
Unless the news that the House has passed the bill to tax those AIG execs that got those bonuses really starts to get the bulls attention, it looks like it might just be a flat or negative day.
Hello Pooh and Baloo, welcome to the party.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Wednesday, March 18, 2009
Bulls Push On! But For How Long? To Inflation and Beyond!
The markets being followed were mostly green today, with solid gains, but how long will this little rally last?
Asia:
Nikkei => 7,972.17, +23.04, +0.29%
Hang Seng => 13,117.17, +239.08, +1.86%
Straits Times => 1,575.94, +16.91, +1.08%
Europe:
FTSE => 3,804.99, -52.11, -1.35%
DAX => 3,996.32, +8.55, +0.21%
CAC => 2,760.34, -6.94, -0.25%
U.S.:
Dow => 7,486.58, +90.88, +1.23%
Nasdaq => 1,491.22, +29.11, +1.99%
S&P => 794.35, +16.23, +2.09%
Me:
AMD => 2.97, +0.21
F => 2.47, +0.19
FPL DI => 3.89, +0.08 (Note: Closing Bid was 5.50, so unofficial change is +1.69)
NG=> 2.51, +0.26
Today was an impressive push to the upside in late trading. Reason for the push was the announcement that the Federal Reserve would buy $300 billion in government debt (long-term Treasury securities). Why would this cause the market to go up? Well that took me a moment to figure out.
Apparently it is a speculative reaction. Investors are assuming that if the Federal Reserve is buying the debt that the government has racked up, then the Fed is showing confidence that the debt will be payed off. In other words, that all the assistance that the government has supplied to struggling banks will be paid back with interest. Now this interest needs to be significant enough to cover the interest to be paid out to the Fed for buying the Treasury securities. If these banks are going to be able to pay back their debt with interest significant enough to pay back the aid they received, then they should be liquid enough to lend money to you and I, in the form of mortgages, loans, and credit card limits. Right?
But there is more. The Federal Reserve also lends money out to the banks themselves. Money they use to lend to you and I at a marked up interest rate. Doesn't something seem strange about that? The Federal Reserve is effectively loaning money out to these same banks by means of two different avenues. And where are they getting this money to buy the Treasury securities and loan to the banks? They get it from the U.S. Treasury that prints the money and stamps the coins. Hmm, I smell inflation coming around the corner very quickly, how about you?
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Asia:
Nikkei => 7,972.17, +23.04, +0.29%
Hang Seng => 13,117.17, +239.08, +1.86%
Straits Times => 1,575.94, +16.91, +1.08%
Europe:
FTSE => 3,804.99, -52.11, -1.35%
DAX => 3,996.32, +8.55, +0.21%
CAC => 2,760.34, -6.94, -0.25%
U.S.:
Dow => 7,486.58, +90.88, +1.23%
Nasdaq => 1,491.22, +29.11, +1.99%
S&P => 794.35, +16.23, +2.09%
Me:
AMD => 2.97, +0.21
F => 2.47, +0.19
FPL DI => 3.89, +0.08 (Note: Closing Bid was 5.50, so unofficial change is +1.69)
NG=> 2.51, +0.26
Today was an impressive push to the upside in late trading. Reason for the push was the announcement that the Federal Reserve would buy $300 billion in government debt (long-term Treasury securities). Why would this cause the market to go up? Well that took me a moment to figure out.
Apparently it is a speculative reaction. Investors are assuming that if the Federal Reserve is buying the debt that the government has racked up, then the Fed is showing confidence that the debt will be payed off. In other words, that all the assistance that the government has supplied to struggling banks will be paid back with interest. Now this interest needs to be significant enough to cover the interest to be paid out to the Fed for buying the Treasury securities. If these banks are going to be able to pay back their debt with interest significant enough to pay back the aid they received, then they should be liquid enough to lend money to you and I, in the form of mortgages, loans, and credit card limits. Right?
But there is more. The Federal Reserve also lends money out to the banks themselves. Money they use to lend to you and I at a marked up interest rate. Doesn't something seem strange about that? The Federal Reserve is effectively loaning money out to these same banks by means of two different avenues. And where are they getting this money to buy the Treasury securities and loan to the banks? They get it from the U.S. Treasury that prints the money and stamps the coins. Hmm, I smell inflation coming around the corner very quickly, how about you?
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
Tuesday, March 17, 2009
World Markets Mixed; U.S. Beginning of Recession Stagnation?
Yesterday, the rally train looked like it ran out of steam, and I made some predictions as to what the market results for Monday meant. I will discuss these in a little bit. But first, the market results.
The Nikkei put in solid gains today, while the rest of Asia swallowed modest losses. Europe continued that sentiment with losses for their major three indecies. The U.S., on the other hand, after a slow and mixed start attempted to swallow up all the losses that were put in yesterday.
By mid-day all indecies put in a solid gain of at least 1%. At the closing bell all three indecies recorded more than 2% in gains. This was on news that construction of new homes are starting to go up and so are the wholesale prices, as well as the continued exercise by the Obama administration and the Treasury to stop and retrieve the money that AIG paid out in bonuses to members of the division that caused AIG to stumble.
Asia:
Nikkei => 7,949.13, +244.98, +3.18%
Hang Seng => 12,878.09, -98.62, -0.76%
Straits Times => 1,559.03, -27.29, -1.72%
Europe:
FTSE => 3,857.10, -6.89, -0.18%
DAX => 3,987.77, -56.77, -1.40%
CAC => 2,767.28, -24.38, -0.87%
U.S.:
Dow => 7,395.70, +178.73, +2.48%
Nasdaq => 1,462.11, +58.09, +4.14%
S&P => 778.11, +24.22 +3.21%
Me:
AMD => 2.76, +0.28
F => 2.28, +0.18
FPL DI => 3.81, +0.21
NG => 2.25, -0.15
Yesterdays opinion included a probability spread about what the market would do today. In that prediction I said:
So what did the market do today? It ran stagnant. How can I say that? The news produced today was only enough to swing the prediction about 20% toward stagnation. This is because it did not create a significant change of opinion to cause it to advance significantly above highs of yesterday.
The fact that there was good economic news in regards to home building and wholesale goods is promising. However, there was still the occasional layoff report such as the laying off of 2,454 workers in 3 states by Caterpiller. Those, fortunately, are becoming less frequent. It is logical to say that the bear is wounded but not dead, yet.
So what am I predicting for tomorrow? Well my opinion is still bearish for the general market. See the bullet points I provided in Day Five of the Bull? for my reasons why. I do also have something to add. It is my opinion that we may start seeing the market creating a base, and it may be relatively "thick". What I mean by "thick" should become apparent as I give you my numbers.
For at least the next three to six months, I see the Dow bouncing between 6500 and 7500, the Nasdaq between 1250 and 1450, and the S&P between 650 and 800. These numbers are the most recent support and resistance levels that they have encountered. Considering all the world news and the increasing positive tone, these seem to be most logical to me. The prefect place for day- and swing-traders to play.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
The Nikkei put in solid gains today, while the rest of Asia swallowed modest losses. Europe continued that sentiment with losses for their major three indecies. The U.S., on the other hand, after a slow and mixed start attempted to swallow up all the losses that were put in yesterday.
By mid-day all indecies put in a solid gain of at least 1%. At the closing bell all three indecies recorded more than 2% in gains. This was on news that construction of new homes are starting to go up and so are the wholesale prices, as well as the continued exercise by the Obama administration and the Treasury to stop and retrieve the money that AIG paid out in bonuses to members of the division that caused AIG to stumble.
Asia:
Nikkei => 7,949.13, +244.98, +3.18%
Hang Seng => 12,878.09, -98.62, -0.76%
Straits Times => 1,559.03, -27.29, -1.72%
Europe:
FTSE => 3,857.10, -6.89, -0.18%
DAX => 3,987.77, -56.77, -1.40%
CAC => 2,767.28, -24.38, -0.87%
U.S.:
Dow => 7,395.70, +178.73, +2.48%
Nasdaq => 1,462.11, +58.09, +4.14%
S&P => 778.11, +24.22 +3.21%
Me:
AMD => 2.76, +0.28
F => 2.28, +0.18
FPL DI => 3.81, +0.21
NG => 2.25, -0.15
Yesterdays opinion included a probability spread about what the market would do today. In that prediction I said:
I predict a 10% chance of a big rally, 30% chance of stagnant movement, but a 60% chance of the bears taking over.I should probably supply some detail about how I came up with my percentages, and I think I will, just not today. To keep it simple I will say this much; a third is the chart performance, a third are the indicators, and a third is the news. Since, the news yesterday was primarily about the AIG bonuses, I allowed it to carry over to the bear side of my analysis. I also allow up to 10% for the occasional anomaly. Something that has become more common in these economic times.
So what did the market do today? It ran stagnant. How can I say that? The news produced today was only enough to swing the prediction about 20% toward stagnation. This is because it did not create a significant change of opinion to cause it to advance significantly above highs of yesterday.
The fact that there was good economic news in regards to home building and wholesale goods is promising. However, there was still the occasional layoff report such as the laying off of 2,454 workers in 3 states by Caterpiller. Those, fortunately, are becoming less frequent. It is logical to say that the bear is wounded but not dead, yet.
So what am I predicting for tomorrow? Well my opinion is still bearish for the general market. See the bullet points I provided in Day Five of the Bull? for my reasons why. I do also have something to add. It is my opinion that we may start seeing the market creating a base, and it may be relatively "thick". What I mean by "thick" should become apparent as I give you my numbers.
For at least the next three to six months, I see the Dow bouncing between 6500 and 7500, the Nasdaq between 1250 and 1450, and the S&P between 650 and 800. These numbers are the most recent support and resistance levels that they have encountered. Considering all the world news and the increasing positive tone, these seem to be most logical to me. The prefect place for day- and swing-traders to play.
That is my opinion, you can take it or leave it.
Disclaimer: I am not a stock broker; I am not a financial advisor; I am not recommending to you what to buy or sell. I am just an opinionated investor. If you decide to follow in my footsteps you are taking risk. It is inevitable that I may be wrong. So if you are going to follow in my footsteps that is your own personal decision. I am not responsible for any loss that you may, and probably will, incur regardless of my opinion.
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