Seems like 171 points isn't much these days. The Dow rose nearly 200 points with little excitement. Early sentiment from IBM on pre annnouncement of earnings served as a gap up and level off market. Todays range was narrow indeed which leads me to conclude that a move is still brewing which might happen tomorrow or wednesday.
AGU and MON seem to be moving higher and might prove to the be hot sector in the early 2008 trading. I am still in watch mode here as I believe we will get a move this week more than likely to the upside which will be short lived.
Last week I noted the weak showing for the gambling stocks and they continued today even with the market up almost 200 points. LVS and MGM can easily see 52 week lows from here while HET although at its 52 week high should follow the group down. Wait for these stocks to flag to get on board short.
Intel reports tomorrow and it will be interesting to see how they will spin the last quarter. Although I am not one to guess I believe chip manufacturer are under pricing pressures and Intel will show declining margins. AMD is totally dead in the water for the last two years and with APPLE using more Intel chips AMD market share should deteriorate over time. DELL is my top pick for a dud of the year award. I think HP and APPLE will slowly prove too much for Michael Dell's company in the future.
STOCK TO WATCH: SOLF
SOLF has been on a run lately with all the solar stocks. I think SOLF trades back into the teens easily. Look at some $20 puts to limit risk.
Monday, January 14, 2008
Sunday, January 13, 2008
Week ahead
This week will be very interesting for traders. Talk in many financial publications over the weekend of increased probability of recession will leave many traders on the sidelines waiting to see what the Federal Reserve will do next week and how the Fed is perceiving the current economic conditions. Unemployment rate hit a two year high last week and most like myself think that the mortgage downturn will lead to more deterioration of the labor market and economy itself.
This week there are a few important numbers to look at, to see if the market can find some short term support and initiate some short covering. First number on my radar is the the 1396 number on the ES as minor support if we do break that 1400 level. Below that we can easily drift or capitulate towards 1375/1378 area. Please note i am not currently looking at my charts so these numbers aren't exact but rounded points of interests.
Oil should be in play this week as I think we are heading into the important spring change over of heavy to light sweet crude. Light sweet crude is much more refined and has a higher value because of this. Seasonality should play out in this commodity market and Oil should in a few weeks head higher as we move closer into the high driving season for the United States. Where does Oil go? best guess is that is challenges that $100 level and this time will have a better chance to breach it. I have been saying oil should touch $100 since 2003 and was ridiculed by fellow traders. Gold seem also to be setting up bull flags on each pullback and shows no signs presently of making any dramatic pullback without some outside influence such as strength in the US dollar or real slowdown of Global markets.
Monday look out for the first hour highs and lows and play the market accordingly. The first hour break should set the tone for the day but no mistake we could chop around till earnings season start or the Fed meeting next week. I still believe with the oversold conditions here we can bounce but market sentiment needs to be respected.
This week there are a few important numbers to look at, to see if the market can find some short term support and initiate some short covering. First number on my radar is the the 1396 number on the ES as minor support if we do break that 1400 level. Below that we can easily drift or capitulate towards 1375/1378 area. Please note i am not currently looking at my charts so these numbers aren't exact but rounded points of interests.
Oil should be in play this week as I think we are heading into the important spring change over of heavy to light sweet crude. Light sweet crude is much more refined and has a higher value because of this. Seasonality should play out in this commodity market and Oil should in a few weeks head higher as we move closer into the high driving season for the United States. Where does Oil go? best guess is that is challenges that $100 level and this time will have a better chance to breach it. I have been saying oil should touch $100 since 2003 and was ridiculed by fellow traders. Gold seem also to be setting up bull flags on each pullback and shows no signs presently of making any dramatic pullback without some outside influence such as strength in the US dollar or real slowdown of Global markets.
Monday look out for the first hour highs and lows and play the market accordingly. The first hour break should set the tone for the day but no mistake we could chop around till earnings season start or the Fed meeting next week. I still believe with the oversold conditions here we can bounce but market sentiment needs to be respected.
Friday, January 11, 2008
So does January goes! So does the year
Well as we enter the second week of trading for Wall Street we find ourselves in a downtrend left off by the mortgage news of 2007. Today NASDAQ is down 9 out of the last 11 days which now concretely confirms the worst start ever for the markets.
So does January goes! So does the year goes has been a time proven trend in the markets and if this is to be true as always we might be in a world of pain this year. I get asked all the time by people who know that i am a trader and Market lover as what will happen and to be honest I can only say that I dont feel confident based on technicals i see happening now in the market.
What should you do if you invest in 401K, investment accounts etc. I say God be with you in 2008 because i believe the least path of resistance is DOWN. Yes DOWN!
Nothing goes straight down and that must be noted, we should get short covering and periods where the talking heads come out and tell everyone everything is a OK. Well if you have confidence in giving these people your monies to grow and having your accounts year over year remain flat or negative and their bonuses rise to extraordinary levels well go ahead. For me I rather take my money and do the total opposite of what these guys are saying.
Yep the same people who told you to buy CountryWide @$20 because it is the biggest and safest mortgage brokers are the same ones now saying CountryWide @$5 will go bankrupt and will add no value to Bank of America, so take it with a grain of salt.
What will 2008 bring? well we will have to wait and see! right now the charts say we go lower and todays action lead me more on that side. The BIG MONEY is definitely short right now! and believe nothing else, they are lightening up positions because of the uncertainty in the market. Just look at BSC, LEH, TIF etc nothing but down.
So does January goes! So does the year goes has been a time proven trend in the markets and if this is to be true as always we might be in a world of pain this year. I get asked all the time by people who know that i am a trader and Market lover as what will happen and to be honest I can only say that I dont feel confident based on technicals i see happening now in the market.
What should you do if you invest in 401K, investment accounts etc. I say God be with you in 2008 because i believe the least path of resistance is DOWN. Yes DOWN!
Nothing goes straight down and that must be noted, we should get short covering and periods where the talking heads come out and tell everyone everything is a OK. Well if you have confidence in giving these people your monies to grow and having your accounts year over year remain flat or negative and their bonuses rise to extraordinary levels well go ahead. For me I rather take my money and do the total opposite of what these guys are saying.
Yep the same people who told you to buy CountryWide @$20 because it is the biggest and safest mortgage brokers are the same ones now saying CountryWide @$5 will go bankrupt and will add no value to Bank of America, so take it with a grain of salt.
What will 2008 bring? well we will have to wait and see! right now the charts say we go lower and todays action lead me more on that side. The BIG MONEY is definitely short right now! and believe nothing else, they are lightening up positions because of the uncertainty in the market. Just look at BSC, LEH, TIF etc nothing but down.
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