3/25/08
Dow was closed on negative note while S&P, Nasdaq both posted slightly gain today as market absorbed two bad economic data. The Confidence index fell below expectation and reach year 1973 year lows while Housing sales up but with median prices posted signaificant down compare with last year. It gives us that there is long way to reach the bottom. If you are bulls, you might think what can be worst than that? Clearly, I would see three months average of each important economic data to make more reliable judgement call on if we reach the bottom or not. Coming this thursday, our Q4 of 2007 GDP data will be announced and we will see how the economy turned out in the past since this is lagging indicator and it should just give us past performance. The stock market will have limited effect base only on this data if it is much worst than estimate.
Technically, Dow was formed a spin wave candlestick pattern today after few day rally which it means there has some balance between bulls and bears. Tomorrow actor would determine if this rally has any legs to upside til next resistance area 12600 or above 12750.
How to see if market sentiment change, see if market recover intraday lows or gain despite bad ecnomica data and has propel higher if good news come. Or, if market go down even with good news and breakdown rapidly with bad cause. Especially when major indexes meets with important support or resistance level after period of up days or down trend.
Tuesday, March 25, 2008
Sunday, March 23, 2008
Sentiment Changing
3/23/2008
Dow index close higher on weekly basis first time for March. We have not seen problems associated with the financial system since the 1930's !! The FED has been working everyday to try to solve the financial crisis. As I mentioned on date 3/11/08, stock market has found the short term bottom. We could see it last Monday (3/17/08) the market gapped down amidst all the doom news and made new lows by mid day, but it rallied nicely to the end of day. This indicated the market sentiment has been changing to slightly bullish rather than too extreme bearish.
I want to point out that Dow has been formed short term triangle patterns ( +420pts on 3/18/08, -293 pts on 3/19/08, +262 pts on 3/20/08), also major indexes now seems appear to be bullish double inverse H&S patterns on 60mins charts. If the major indexes are able to breakout the necklines of these patterns, it would be bullish and begin a nice counter BEAR market rally!! Remember we are still in BEAR market. Our target for S&P would be in around 1345-1350 if it breaks necklines. Dow would be trading higher than the strong resistance 12750-13000 area.
Over the weekend, S&P has putting Lehman brother and Goldman Sachs in negative outlook mark. If these broker dealers can stay positive tomorrow, it prove sentiment is totally change and financial and bank stocks would be rebounded much higher compare with other sectors. And these two sectors would be very important to contribute the S&P index to breakout the patterns I mentioned above.
For short term bulls, S&P need to take out the resistance 1340-1345 area.
Dow index close higher on weekly basis first time for March. We have not seen problems associated with the financial system since the 1930's !! The FED has been working everyday to try to solve the financial crisis. As I mentioned on date 3/11/08, stock market has found the short term bottom. We could see it last Monday (3/17/08) the market gapped down amidst all the doom news and made new lows by mid day, but it rallied nicely to the end of day. This indicated the market sentiment has been changing to slightly bullish rather than too extreme bearish.
I want to point out that Dow has been formed short term triangle patterns ( +420pts on 3/18/08, -293 pts on 3/19/08, +262 pts on 3/20/08), also major indexes now seems appear to be bullish double inverse H&S patterns on 60mins charts. If the major indexes are able to breakout the necklines of these patterns, it would be bullish and begin a nice counter BEAR market rally!! Remember we are still in BEAR market. Our target for S&P would be in around 1345-1350 if it breaks necklines. Dow would be trading higher than the strong resistance 12750-13000 area.
Over the weekend, S&P has putting Lehman brother and Goldman Sachs in negative outlook mark. If these broker dealers can stay positive tomorrow, it prove sentiment is totally change and financial and bank stocks would be rebounded much higher compare with other sectors. And these two sectors would be very important to contribute the S&P index to breakout the patterns I mentioned above.
For short term bulls, S&P need to take out the resistance 1340-1345 area.
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