Back to the future 2009 to 1997

2/23/09

No follow though day after last friday hammer candlestick, so no reversal pattern, down trend still continue. But even today the S&P closed the lowest since 1997, still above the intra-day low 741 on 11/20/08. There is still little hope for Bulls. Now I offer three market direction that I could forecast based on weekly chart pattern.
Bearish case:
If S&P below 741, the target I see is around 615-625 ultimately. However, if tomorrow bounce back close above 805, it will end this intermediate down trend.
Bullish case:
If S&P does rebound tomorrow and hold the 741, also and close above 805, it has better chance go up to 925.
Bearish Trap case:
This is adding time into analysis, S&P may get below 741 and will bounce around 730-735 area til close back up to 780. Why? Time. 11/21/09-1/6/09 is uptrend rebounce, then by same amount of day trending down, it will be tomorrow 1/6/09-2/24/09. Watch over closely tomorrow!!!

Housing Price is far from bottom !!!

2/23/09

The above chart is made by Professor Shiller. And he has few key points:

• House prices are still only halfway back down to fair value.
• Prices don't usually stop at fair value.
• Obama's plan won't turn house prices around

My comment: Well, like I often cited my analysis approach, we need to see average of last 3 to 6 months data as more concrete base to predict the housing may be reaching the bottom. However, as Professor Shiller's analysis, we are far far from bottom. Good luck to folk who buy real-estate as investment now even the mortgage rate is going lower.
At the time I write this post, Dow is just breaking new fresh bear market low. I believe the damage has been done that S&P no longer sustain the support zone area 740-750.

Dow Next Stop 6000 !!!

2/21/09

To fellow blog readers:

I call it the historical, incredible shrinking Dow tanking since December 2007.

12800 (My official level to determine Dow has finally gone into Bear Market Territory)
10800
8800
7450-7550(Last November Low Area)
7250-7350(Last friday trading day low zone area)
12800 down drain to 7250(So far I saved you 5550 points decline that lose your $$$, yes you if you started to read my blog from beginning)

Next Stop 6,000 ??!

Very Very Sadly, I believe that is quite possible. And I even believe it may go to 4000s area if stimulus plan does not work at all. The government only knows printing trillions of dollars at our economic woes, but all their desperation is doing nothing to truly solve the root of current problems.
So the stock market is headed for another rough road ahead. Rallies may briefly raises false hopes. But reality will kill them again and again and again.
Remember when Dow was traded above 10000 almost every Wall Street experts has called:
"That's the bottom!" (when Dow 10000)
"No, that's the bottom!!" (when Dow 9000)
"Now this is is finally finally th....e bottom..!!!!" (when Dow 7500 last November)

They have been wrong, wrong and wrong, and I have been right, over, over and over again.
Enough of brag myself here. I just want to re-emphasis how important to trade or invest stock market with perspective of technical analysis. This is one and only one knowledge essential to make profit in stock market or any securities.

Revisit last important bear market lows

2/21/09

The following post are written by a self-taught technical analyst who just like me.

The retest of the November lows has finally came. The S&P 500 is still slightly above that support, but the Dow has penetrated it. Even every rally since November has been greeted with hope of a new advance that would end the bear market, the market gradually rolled over into a declining trend after the January top.
The November bottom was also a 9-Month Cycle bottom. In a bull market we would expect the market to rally for several months. The fact that the rally failed so quickly, is a very very bearish sign.
The long term shows that the 2002 bear market lows are also being tested again, so the market is at a very critical point. Many people who are still holding equities (at a 50% loss) are counting on being bailed out by a big rally. If prices fall significantly below long-term support, we are likely to see another heavy selling.
The long-term condition of the market is deeply oversold, as demonstrated by the Percent of Stocks Above Their 200-EMA. This indicator has never been at these low levels for such an extended period of time. Normally, a rally is in the cards as soon as these levels are reached, but the market is flat on its back, and it is hard to say when it will recover. It is important not to get too anxious to get back in. We are in a bear market, and negative outcomes are much more likely than positive ones.
Also, remember that oversold conditions in a bear market are extremely dangerous. If the current support zone fails, a market crash could quickly follow.
Bottom Line: The market is in the midst of a retest of very important support. Since we are in a bear market, I expect that the support will fail.

My comment: I strongly agree with this talent technician. We have been proved correct in most market forecast, especially there are no other good tactic beside trading with technical.

Technical View for S&P and Dow Jones Index

2/20/09

Dow Jones Index is making fresh bear market low. However, it formed hammer doji star with heavy volume and it requires follow though day to confirm this downtrend technically. This is also same for S&P Index. Would S&P call a successful retest low of 2008??! On daily basis, it does need to see coming monday action to determine if this intermediate down trend end today. If we look at the time that today 2/20/09 just exactly 3 months away from last intermediate low at 11/20/08, interesting, isn't it??!
Now, do you remember how many so called Wall Street "Guru" or "Analysist" that last Novermber low is this Bear market bottom??! But, I disagree with them long time ago. I do call this secular bear started since 12/2007 as I started to write this blog. My offical count begun Dow breakdown 12800. How many points we away from that mark??! It is amzaing 5400 points!!! Again, 90% of Wall Street professionals need to go back study what is technical analysis. Only better technicans, Of course I am one of them, are seeing this will happen way ahead anyone. I cannot emphasis how powerful that technical analysis bring me forecast the stock market, each individual stock... Have a nice weekend!!!

Let's Nationalize Banks!!!

2/20/09

Let's see two of biggest banks charts here!!! Nationalization Voice is getting louder and louder that make C and BAC going to drain. Folks, the whole down process is acting perfect technically. The 20MA on daily basis is strong resistance lines and this is the area I recommend to my clients to sell short the stock til today. Yes, so easy!!! so simple!!! However, both stocks are setting reversal pattern and it needs follow thought day to confirm ending this intermediate downtrend.