First Half of Bear Market Year End

6/30/08

US stock markets end mixed today on financial sector losses and additional economic worries. The DOW closed up tiny 3.5 to 11350, the S&P 500 climbed 1.6 to 1280 and the Nasdaq fell 22.6 to 2293. LEH fell to an 8 year low today to 19.68. Technically, the DOW formed another Doji star and so is S&P, if combined with last friday candlestick pattern. Both indexes were close to form a morning star pattern(if tomorrow both indexes are closed on much high notes). It seems that it is good sign for both. But if tomorrow the bears are in control again, market would fall new lows for sure. The crude oil future was trading new highs during middle of the day after closed slightly down from friday closing price. US stock market has posted three consecutive down quarters since year 1978 which was our US oil crisis period with high inflation too. How interesting! Are we getting an economy similar to the year in 70's?? Is stagflation coming?? Prolong recession?? Depression? Whatever what people call for, it is not good definitely. Be careful to pick good stocks to trade. Otherwise, cheap stocks would get cheaper. Buy stocks in downfall is totally like catching a sharp falling knife. Example, AMR(American Airline), all time lows was $1.25 after year 2000 9/11. Now, AMR is trading around $5.00 and it still has lots of room to go down with opposite direction that oil future keep going thru the roof. Good luck to pick the winners before seeing the technical charts.