3/11/08
What a day!! Fed injects up to 200 billion in banking system to rescue the credit market. This action ignite the Dow, S&P, Nasdaq all have biggest gain day of the year. Also, worth to say is Japanese central bank may make intervention that not let the USD/JPY currency pair trading below the 8 years low of 101.40 or 100 level since BOJ did that twice for past 10 years period. Today USD/JPY jump big from 101.41 to 103.40(It is very huge move consider the time taken only 12 hours of trading in currency market)So, with Fed and BOJ help, market can perform such mixed short covering, bargain bottom fishing day. Anyway, this is short term bottom for the market for sure. First of all, banking sector index has formed double bottom, financial also form a bullish engulfing Japanese candlestick chart pattern after three black crow down days. Moreover, market breaths(Such as New highs/new lows of NYSE was hitting historical event yesterday) and put/call ratios was close at 1.48 which both mean the very short term bottom is very close. So, both fundamental and technical are shifting upward to make such a huge jump/turnaround day. Next resistance for Dow is around 12200-250.
Well, we are still in Bear market and there are lots of issue to workout before it builds the real bottom. First, Fed injects 200 billion but if banks are not lending much from Fed( Fed did this before since 12/2007 but not too much effect or help the banking system), it makes no real means for banking system or buildup the confidence again on credit market. Also, Fed would not reduce 0.75% that market need on coming Fed meeting(18th of this month) Most likely, they will lower half percent points. Also, with NFP(Non-farm payroll) data suggest US economy is into recession(For last 100 years, whenever NFP posted 2 contraction number in a row it means most likely economy is entering into recession). Let see if Fed magic works or the Bear would come back strong.
Tuesday, March 11, 2008
Monday, March 10, 2008
Finanical in deep trouble
3/10/08
Last friday the stock market did not meet my expectation that selloff hard. But my source said the non-farm payroll number(-77k) was very close to the real data posted(-63k) Today, market just keep trading what the trend saying- DOWN. FRE, FNM, C, BSC,MER,LEH,...etc are in all fresh 52weeks lows today and drag down the DOW close at 11740 ( about 100 points away from Jan lows-11650) Let see if we have buyers coming in around the top 11650 area, otherwise it will hit the next mark around 11000-11200 level. Suggest investors avoid longing any banking or financial stocks currently even it seems they are very CHEAP. I seldom give trade idea but BIDU is worth to say since this is the last daring in the Wall street. BIDU has not been trading downward with last 2 weeks significantly compare with other big names..appl...goog...rimm...fslr... Also, BIDU is forming an triangle on daily chart. If it breaksout up, it will running at least 30 points higher. If it goes the other way, very likely break 225 support and may sink much lower to 200 level. Good trading this week. Retail index and CPI are to be announced Thursday & Friday.
Last friday the stock market did not meet my expectation that selloff hard. But my source said the non-farm payroll number(-77k) was very close to the real data posted(-63k) Today, market just keep trading what the trend saying- DOWN. FRE, FNM, C, BSC,MER,LEH,...etc are in all fresh 52weeks lows today and drag down the DOW close at 11740 ( about 100 points away from Jan lows-11650) Let see if we have buyers coming in around the top 11650 area, otherwise it will hit the next mark around 11000-11200 level. Suggest investors avoid longing any banking or financial stocks currently even it seems they are very CHEAP. I seldom give trade idea but BIDU is worth to say since this is the last daring in the Wall street. BIDU has not been trading downward with last 2 weeks significantly compare with other big names..appl...goog...rimm...fslr... Also, BIDU is forming an triangle on daily chart. If it breaksout up, it will running at least 30 points higher. If it goes the other way, very likely break 225 support and may sink much lower to 200 level. Good trading this week. Retail index and CPI are to be announced Thursday & Friday.
Thursday, March 6, 2008
Ready for retest
3/6/08
With Dow sitting slightly above 12000, USD/JPY is making fresh new high for JPY. Stock market is ready to retest the 1/08 lows 11650-11700 level very soon. Tomorrow, Non-farm payroll(NFP)
index will be announced 7:30am central time and estimate is +30k jobs created for Feb. If the actual number is way below the mark(on negative side I have my source say -77k), huge stock decline and probably test the 11600-11700 area. Plus,with certain technical level/condition met, stock may bounce back to build a hammer candlestick pattern. If the NFP is much better than estimate, expect market would rally around to 12300-12350 area. Last case, stock selloff huge to 11600 or maybe lower cause nasday 100 index is just barely sitting to solid support 1700 level,if it trades deeply lower to 1600-1650 then I expect we may not have good bounce rally. Also, see the USD/JPY to which level to alter the trend then market has a chance to bounce from deep selloff.
Good luck to whoever long stocks
With Dow sitting slightly above 12000, USD/JPY is making fresh new high for JPY. Stock market is ready to retest the 1/08 lows 11650-11700 level very soon. Tomorrow, Non-farm payroll(NFP)
index will be announced 7:30am central time and estimate is +30k jobs created for Feb. If the actual number is way below the mark(on negative side I have my source say -77k), huge stock decline and probably test the 11600-11700 area. Plus,with certain technical level/condition met, stock may bounce back to build a hammer candlestick pattern. If the NFP is much better than estimate, expect market would rally around to 12300-12350 area. Last case, stock selloff huge to 11600 or maybe lower cause nasday 100 index is just barely sitting to solid support 1700 level,if it trades deeply lower to 1600-1650 then I expect we may not have good bounce rally. Also, see the USD/JPY to which level to alter the trend then market has a chance to bounce from deep selloff.
Good luck to whoever long stocks
Monday, March 3, 2008
Buffet say recession word
3/3/08
The great investor in the world Warren Buffet said US economy is already in recession today. More and more people can feel the economy is getting worse recently and I pointed that month ago that stock market index made bearish move(keep rolling down monthly). Today, Nasdaq made another lows of the year. Dow transportation index hit the good support index 8900 (Dow 12175) to end the last few days selloff. Watch Dow 12365(+/-25 pts) as next resistance tomorrow. The most important economic data would be the non-farm payroll this friday and if it falls out of expectation, market probably start another round of selloff. Although estimate predict number would be on + 30k but I find a more reliable resource that the number would be around -77k. But I still stand my view that the Dow must need test the Jan lows(11650).
The great investor in the world Warren Buffet said US economy is already in recession today. More and more people can feel the economy is getting worse recently and I pointed that month ago that stock market index made bearish move(keep rolling down monthly). Today, Nasdaq made another lows of the year. Dow transportation index hit the good support index 8900 (Dow 12175) to end the last few days selloff. Watch Dow 12365(+/-25 pts) as next resistance tomorrow. The most important economic data would be the non-farm payroll this friday and if it falls out of expectation, market probably start another round of selloff. Although estimate predict number would be on + 30k but I find a more reliable resource that the number would be around -77k. But I still stand my view that the Dow must need test the Jan lows(11650).
Friday, February 29, 2008
Bloodbath selloff
2/29/08
As expected, Dow reached the resistance point area 12750 then big selloff kickin and today closed at barely above 12250(closed 12266). The Nasdaq finished at 2271 a 17-week low and has broken down the triangle formation. Gold keep rising to 1000, Crude oil trading above 100 for few days and US dollar sinking to historical low. GDP on last quarter of 2007 is barely up 0.6% which the growth has stalled. More fearful economical effects will be coming and I will mention on the following:
It is about $45 trillion of credit default swaps out in the financial market. A default on a merely 10% would cause an economic disaster and I strongly believe it will happen. The whole downtrend for economic and stock market have just met the first quarter of the down ride. Here I quoted his from other blog "The credit swaps on MBIA, Ambac, and the homebuilders trade deep into junk, some priced outright for default. Is there any wonder Moody's, Fitch, and the S&P are reluctant to downgrade MBIA and Ambac? The ratings assigned to Ambac and MBIA are a joke." If MBIA & Ambac got downgraded by any rating firms, it will cause huge decline for stock market.
Keep in short, I believe Stock market is going into downward spiral and we will see the Dow trade below 1/2008 lows and heading into 11000 mark first. The burst started from summer of 2007 and it seems to me the downside ride has finished about quarter. There are more severe quarter road to walk. Happy trading in March.
As expected, Dow reached the resistance point area 12750 then big selloff kickin and today closed at barely above 12250(closed 12266). The Nasdaq finished at 2271 a 17-week low and has broken down the triangle formation. Gold keep rising to 1000, Crude oil trading above 100 for few days and US dollar sinking to historical low. GDP on last quarter of 2007 is barely up 0.6% which the growth has stalled. More fearful economical effects will be coming and I will mention on the following:
It is about $45 trillion of credit default swaps out in the financial market. A default on a merely 10% would cause an economic disaster and I strongly believe it will happen. The whole downtrend for economic and stock market have just met the first quarter of the down ride. Here I quoted his from other blog "The credit swaps on MBIA, Ambac, and the homebuilders trade deep into junk, some priced outright for default. Is there any wonder Moody's, Fitch, and the S&P are reluctant to downgrade MBIA and Ambac? The ratings assigned to Ambac and MBIA are a joke." If MBIA & Ambac got downgraded by any rating firms, it will cause huge decline for stock market.
Keep in short, I believe Stock market is going into downward spiral and we will see the Dow trade below 1/2008 lows and heading into 11000 mark first. The burst started from summer of 2007 and it seems to me the downside ride has finished about quarter. There are more severe quarter road to walk. Happy trading in March.
Wednesday, February 27, 2008
More rate cut likely
2/27/08
Investors just need to take some profit after 3 days rally breakout from triangle formation that I mentioned from last post. Also, Dow is hitting the resistance level 12750 and formed bearish doji star candlestick pattern. But if Dow trade above 12750 and lasting long enough, it is very bullish side for equities. Also, US dollar is breaking history lows compare with other major currencies, like Euro/US trade above 1.50 level and Crude oil is trading above 100 for 2 days. With high inflationary pressure, high commodities and energy price, us economy is entering stagflation likely.
Investors just need to take some profit after 3 days rally breakout from triangle formation that I mentioned from last post. Also, Dow is hitting the resistance level 12750 and formed bearish doji star candlestick pattern. But if Dow trade above 12750 and lasting long enough, it is very bullish side for equities. Also, US dollar is breaking history lows compare with other major currencies, like Euro/US trade above 1.50 level and Crude oil is trading above 100 for 2 days. With high inflationary pressure, high commodities and energy price, us economy is entering stagflation likely.
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