UPS cut outlook view

4/9/08

UPS cut first quarter earning outlook lower then expected results due to weak US economy and higher oil cost, so US stock market going down about 50 points. UPS has 75% business earned in our own continent. Usually, UPS is one of the barometer of US economy health if you have access to see the last 20 years chart data of UPS and you will know why. Therefore, I do not see US economy would getting out of recession in coming months and it looks like will last longer than previous 2 recession ( 8 months in years 2000-2002, 7 months in years 1991-1992).
As I said market was formed four doji star pattern and since market is going down slowly. It confirms the reversal signal to end the recent rally. The resistance area of DOW 12700-12750 is really hard to break as last five day showed to traders/investors. How do I know that ahead of what has happened before Dow reach the resistance or fundamental news came to affect the market. This is the power of technical analysis which give me an edge to expect what would happen to stock market or stock trend/price level. Although it is not 100% reliable or accurate, it increase your odds to win the game. Market sentiment condition has improved that once breakdown support level, the rate of downward motion is slower than date from 1/2008 to 3/2008. It seems to tell me that traders/investors are waiting to see this earning season. The results of good earnings and guidance would definitely decide the next trend of the stock market.
Remember, banks & financial are compose of 20% of S&P and WM, MER and C will be announced their earning on next week. However, the next week friday 4/18/08 is options expire date for this month and I may suspect that even there are some bad news from financial or bank and it will not drag down too much because the big player do not let people to earn too much premium on puts options. Let see how market goes tomorrow.
P.S. the Dow transport index did hit the support level and bounce, so Dow has bounce at last hour of today trading.