4/11/08
As traders finally end their trick to public, they are acting accordingly bad earning news of GE ( down 13%, its biggest one day percentage drop since crash of market year 1987) and consumer sentiment index sliding to its lowest level since 3/1982. Now, I guess why I am very right to remain bearish and my predict the recent market top is correct. I have mentioned the April Fools Rally on 4/1/08 is really an April Fools play to public investors and now is solid proof since all major indexes are closed almost at the same level as the day before 4/1/08. Do I know the GE would post missed earning and trim their guidance ( Remember the CEO has kinda promise stockholders that earning outlook for year 2008 is $2.42 per share back at 12/2007). Now, he changes to $2.20-$2.30 per share for the outlook. Do anyone still believe how American corporate or their CEO doing their job?
I just wanna say that Technical analysis does give you an edge well before that happen. As I ain't a buyer of anything after 4/3/08 as I wrote it probably is market top and so I ain't a loser in this fake rally.
Next week is very tough to predict as many economic news as well as many Big companies post their earning reports ( Of course the outlook if they dare to give ). In addition, next friday is options expiration. Therefore, I try my best to indicate the important level of major indexes support and resistance. I recommend do not hold or trade in next week unless you are daytrading. Good luck to all and have a nice weekend.
Friday, April 11, 2008
Wednesday, April 9, 2008
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.
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.
Monday, April 7, 2008
Another Doji star
4/7/08
Major US stock indexes are forming the forth day Doji star pattern( today is tending slightly more bearish than previous day since today it is a high wave Doji gravestone star pattern). The evening star pattern that I have been waiting for the reveral signal is pending to form once tomorrow close in negative note(need at least 100+points). Then these last weeks bullish sentiment is about gone. Especially, traders are more concerning about the earnings season started with AA which posted result slightly higher than estimate but net income fall below 50% compare with last year. Well, I guess that is expected for evey companies, right. The forward guardiance is more important from now on. AMD trim outlooks and layoff 10%worker ( total employee 160000 data from yahoo.com)..so..another layoff...expect it is coming...LAYOFFS. Even WM has raised 5 billions but WM has not closed above resistance level yet. This quarter earning report is very important, keep an eye close and realize the sentiment outcome from the market(stock price action).
Sunday, April 6, 2008
Bad jobs data
4/4/08
Finally, Non-farm payroll data posted in lost of 80,000 jobs that US economy has three consecutive months in a row of job losses. As mentioned last blog and earlier blog that US has already in recessionary mood and the job market must keep getting worse before it gets better. With this only information, I am certainly saying US stock market will not have meaning rally that could last long.
Technically, stock market behave nicely to absorb the bad data on friday. It formed another Doji japanese candlestick pattern again meaning bulls & bears has balance power. If monday that market could breakout the resistance 12750(roughtly 12700-12750), bulls traders are in total control and will make it close to 13000 mark. Otherwise, if fail to keep above 12530 mark, market would lose at least 200 points. I want to point out here even if Dow could make it to 12800-13000, there has strong downtrend line draw from tops of 11/07, twice tops occur in 12/07 on daily chart basis. Also, the credit crunch,housing problem,mortgage problem....have not gone right away. As I said, it cannot just take 6 months of stock market correction to put behind all these problems. I am still remain bearish in long term. After next week, it would be our first quarter of 2008 earning reports for big names and it would give us the future picture of US economy from corporate companies point of view.
Almost everyday, I noticed that US has more and more problems arise from horizon. US consumers are falling into delinquencies on installment debt at the worst pace since recession of 1992 ( NY post on 4/4/08). We have 3 airlines company filed bankrupt, Dell is going to cut more jobs that they first decided months ago. GM is currently halting 30+ factories because of Labor problems. Housing foreclosure is rising up 100% compare with same quarter on 2007....
Folks, do you still believe we could have meaningful rebound on our stock market or economy with so much mess that need more time to resolve. We are not out of the wood yet and there is still long way to reach the end. I would say this is the end of the beginning with Fed has done many stuffs to advert US financial system in deep crisis. But our economy is for sure in a very very difficult time. Main key of the root I think would be the housing price. With no bottom in sight, those above mentioned problems would not be disappear. Base on IMF's "World Economic Outlook"from april 2003, housing price corrections averaged 30% and last about 4 years. Moreover, all major banking crises in industrial countries during the postwar period coincided with housing price busts. For US, it need at least 2 to 2 1/2 years more to reach the bottom based on the IMF data. Let's see if history could guide us in smart way to invest in real estate.
Finally, Non-farm payroll data posted in lost of 80,000 jobs that US economy has three consecutive months in a row of job losses. As mentioned last blog and earlier blog that US has already in recessionary mood and the job market must keep getting worse before it gets better. With this only information, I am certainly saying US stock market will not have meaning rally that could last long.
Technically, stock market behave nicely to absorb the bad data on friday. It formed another Doji japanese candlestick pattern again meaning bulls & bears has balance power. If monday that market could breakout the resistance 12750(roughtly 12700-12750), bulls traders are in total control and will make it close to 13000 mark. Otherwise, if fail to keep above 12530 mark, market would lose at least 200 points. I want to point out here even if Dow could make it to 12800-13000, there has strong downtrend line draw from tops of 11/07, twice tops occur in 12/07 on daily chart basis. Also, the credit crunch,housing problem,mortgage problem....have not gone right away. As I said, it cannot just take 6 months of stock market correction to put behind all these problems. I am still remain bearish in long term. After next week, it would be our first quarter of 2008 earning reports for big names and it would give us the future picture of US economy from corporate companies point of view.
Almost everyday, I noticed that US has more and more problems arise from horizon. US consumers are falling into delinquencies on installment debt at the worst pace since recession of 1992 ( NY post on 4/4/08). We have 3 airlines company filed bankrupt, Dell is going to cut more jobs that they first decided months ago. GM is currently halting 30+ factories because of Labor problems. Housing foreclosure is rising up 100% compare with same quarter on 2007....
Folks, do you still believe we could have meaningful rebound on our stock market or economy with so much mess that need more time to resolve. We are not out of the wood yet and there is still long way to reach the end. I would say this is the end of the beginning with Fed has done many stuffs to advert US financial system in deep crisis. But our economy is for sure in a very very difficult time. Main key of the root I think would be the housing price. With no bottom in sight, those above mentioned problems would not be disappear. Base on IMF's "World Economic Outlook"from april 2003, housing price corrections averaged 30% and last about 4 years. Moreover, all major banking crises in industrial countries during the postwar period coincided with housing price busts. For US, it need at least 2 to 2 1/2 years more to reach the bottom based on the IMF data. Let's see if history could guide us in smart way to invest in real estate.
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