12/14/07
Economic number core CPI rose 0.3% ( expected 0.2%) give indication that Fed may not reduce the interest rate on next meeting to avoid recession. So, US stock market fall 178 points and closed below the 13400 mark. Dow index was down 2.0% for this week. Similar with the last Fed rate cut meeting week that all stock index was trading down. The risk of US economy recession is getting higher than economists thought in summer time. Well, look at the Dow/Dow composite/S&P indexs charts, all are telling us that no more bullish run.
Since mid years, AAPL, RIMM, GOOG, and BIDU are leaders stocks to carry whole US stock market til today. But, RIMM recently is getting weak compare with others three. Solar stocks group are also performing well at last quarter this year so far. Watch those stocks if they are heading higher or not, it indicates the real direction of the market.
Friday, December 14, 2007
Thursday, December 13, 2007
Uncertainity
12/13/07
Normally, Stock market top is happened at the extreme that most investors put in excessive speculation. Three times Fed rate cut ( total 100 basic point ) has not given any boost for the market. Moreover, Dow has strong resistance at 14000 to 14100 level and has formed double top ( technically at July & Oct highs). Also, S & P index just back off the same high level 1560 to 1570( year 2000 high). So, it seems we are at the edge of last phase of the bull market started from late 2002 and entering new stage of bear market. How long it last for the bear if Dow closed below 12800?? That depends on how much the Fed need to reduce the interest rate and also if US employment condition remain in good shape.
Normally, Stock market top is happened at the extreme that most investors put in excessive speculation. Three times Fed rate cut ( total 100 basic point ) has not given any boost for the market. Moreover, Dow has strong resistance at 14000 to 14100 level and has formed double top ( technically at July & Oct highs). Also, S & P index just back off the same high level 1560 to 1570( year 2000 high). So, it seems we are at the edge of last phase of the bull market started from late 2002 and entering new stage of bear market. How long it last for the bear if Dow closed below 12800?? That depends on how much the Fed need to reduce the interest rate and also if US employment condition remain in good shape.
Wednesday, December 12, 2007
Reversal Day
12/12/07
Day after Fed announced quarter point rate cut, US stock market open in high note due Fed issue a plan with Europe, England, Swiss, and Canada Central Bank to resolve the global liquidity problem. But it also means subprime mess has severely damage the credit market. Traders/investers are selling the Dow from 270 points opening high to negative territory as low as 110 points area. The Dow trade below 13400 level for awhile before closed at 13473. It is still bearish for the Dow. The Traditional Christmas Santa Rally may not be occured this year.
Day after Fed announced quarter point rate cut, US stock market open in high note due Fed issue a plan with Europe, England, Swiss, and Canada Central Bank to resolve the global liquidity problem. But it also means subprime mess has severely damage the credit market. Traders/investers are selling the Dow from 270 points opening high to negative territory as low as 110 points area. The Dow trade below 13400 level for awhile before closed at 13473. It is still bearish for the Dow. The Traditional Christmas Santa Rally may not be occured this year.
Tuesday, December 11, 2007
Bears come back in US stock market
12/11/07
What a bearish candlestick pattern(Bearish Engulfing) was formed! ( Date 12/10/07 & today)!!! As expected, traders are selling the Fed 25 basic points (market wants 50 basic point) rate cut news once again as usual since the recent rally has priced in the quarter point rate cut. All indexs are posting huge loss today because Fed does not give any clear indication from the statement neither.
Watch over the DOW index 13400 level as support ongoing. But it seems market is about time to head lower(retest 12800 level).
If the Dow Index is trading closed below 12800 for over a week, the primary strong bull trend started from late 2002 will be running out of picture. What it means, it may start as new BEAR market. Lets watch.
Old time repost
01/08/01
Some interesting numbers of year 2000 techs market
There were two major down trends emerged in the year of 2000 for Nasdaq index
1. From 3/27/00 to 5/24/00
2. From 9/4/00 to 1/3/01
Within 88 trading days, 51 days were trading downwardUp vs: Down days ration is about 1:2 and Nasdaq did fall about 2000 points too ( We did not see 3 consecutive up days since Labor day)
Market breadth has been improved....
12/21/00 with the NDX( Nasdaq 100 index ) at 2210 Nasdaq new low are 788
01/02/01 with the NDX at 2129 Nasdaq new lows was bullishly reduced to 118
Some interesting numbers of year 2000 techs market
There were two major down trends emerged in the year of 2000 for Nasdaq index
1. From 3/27/00 to 5/24/00
Within 43 trading days, 26 days were trading downward Up vs: Down days ratio is about 2:3 and Nasdaq did fall about 2000 points
Within 88 trading days, 51 days were trading downwardUp vs: Down days ration is about 1:2 and Nasdaq did fall about 2000 points too ( We did not see 3 consecutive up days since Labor day)
Market breadth has been improved....
12/21/00 with the NDX( Nasdaq 100 index ) at 2210 Nasdaq new low are 788
01/02/01 with the NDX at 2129 Nasdaq new lows was bullishly reduced to 118
Bear corner
Its so interesting that chicago has two sporting team named "Bears" and "Bulls". The reason I mention it because we do have people who are bearish or bullish about the US stock market.
I, myself is leaning toward more bearish since we had credit, subprime mess and housing crash happened. The last good support is US employment. So far, the employment condition is acceptable so the Stock market still perform in upward direction. If the unemployment index is rising, I would be proudly to announce I am a "Bears" means I definitely bearish for the US stock market. Let see if Fed could resuce our US economy by reducing interest rate cut again.
I, myself is leaning toward more bearish since we had credit, subprime mess and housing crash happened. The last good support is US employment. So far, the employment condition is acceptable so the Stock market still perform in upward direction. If the unemployment index is rising, I would be proudly to announce I am a "Bears" means I definitely bearish for the US stock market. Let see if Fed could resuce our US economy by reducing interest rate cut again.
Little Advice
My blog is solely for sharing only and do not involve any trading or investing ideas. Be prepared to adjust your own trading/investing tastics. Thanks for reading.
Bear Market Info
15 bear markets from 1929 to present.
Declines in the SPX for those bears ranged from 20% to 86.2%.
Excluding the 86.2% 1929-1932, average decline is 33.5%.
The duration from peak to trough ranged from 3 months to 3.5 years
Median duration from peak>trough has been 1.3 years.
Declines in the SPX for those bears ranged from 20% to 86.2%.
Excluding the 86.2% 1929-1932, average decline is 33.5%.
The duration from peak to trough ranged from 3 months to 3.5 years
Median duration from peak>trough has been 1.3 years.
Some Trading Basic Rules
1. Volume is Crucial.
2. Only trade breakouts with an excellent volume% relative to their 60-day volume average
3. Avoid entering new positions in the first 15-mins after market open
4. Avoid holding a position into earnings
5. Do not enter a position early, wait for a pattern to setup
6. Avoid averaging down if a position goes against you. Maintain proper mental stops. If the stock moves back up, you can always reenter.
7. Pick up good entry point that reward ratio:risk ratio at least 2.5:1
2. Only trade breakouts with an excellent volume% relative to their 60-day volume average
3. Avoid entering new positions in the first 15-mins after market open
4. Avoid holding a position into earnings
5. Do not enter a position early, wait for a pattern to setup
6. Avoid averaging down if a position goes against you. Maintain proper mental stops. If the stock moves back up, you can always reenter.
7. Pick up good entry point that reward ratio:risk ratio at least 2.5:1
Sunday, December 9, 2007
US Stock Market
12/9/07
The Dow Industrial Index is rallying with expectation of the Fed rate cut next week. The candlestick Doji star pattern formed on 12/7/07 may indicate the uptrend correction is losing momentum. Closed below 13400 would warn a retest of 12800. If Fed rate cut is 50 basic point, it may signal a 300+ point rally. However, it also signal that the recession risk is much higher. Dow is in the overbought zone by full Sto%.
Solar stocks are all rallying since 11/30/07. FSLR, SPWR, JASO, STP, TSL, LDK, SOLF are trending up and worth to watch for upcoming week due the congress energy bill would boost those stocks up more.
The Dow Industrial Index is rallying with expectation of the Fed rate cut next week. The candlestick Doji star pattern formed on 12/7/07 may indicate the uptrend correction is losing momentum. Closed below 13400 would warn a retest of 12800. If Fed rate cut is 50 basic point, it may signal a 300+ point rally. However, it also signal that the recession risk is much higher. Dow is in the overbought zone by full Sto%.
Solar stocks are all rallying since 11/30/07. FSLR, SPWR, JASO, STP, TSL, LDK, SOLF are trending up and worth to watch for upcoming week due the congress energy bill would boost those stocks up more.
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