Dow & S&P 500 market analysis for 04/27/2009 Monday

Dow & S&P 500 market analysis

The market had been very volatile for the past week. Making huge drops and huge rallies in record speed though it had not been really going anywhere. (The week ended slightly down) I believe the rally had ended on last Monday and the last week was just the market resisting the change in trend. The news reports were mostly disguised as good news when it was actually bad.

Some examples below:

American Express Profit Falls But Blows Past Forecasts

“American Express reported earnings that declined from last year as the company struggled with higher bad loans, but the results easily oustripped analysts' estimates, sending its stock higher in late trading Thursday.”

http://www.cnbc.com/id/30364098


Sharp suffers loss, sees profit ahead

“Earlier this month, Sharp downwardly revised its forecasts of financial results, saying it expected a net loss of 130 billion yen for the year, bigger than the loss of 100 billion yen it had initially forecast in early February.”

http://www.marketwatch.com/news/story/Sharp-suffers-annual-loss-sees/story.aspx?guid=%7BF6EF2A49%2DE200%2D4926%2DBFD9%2DBE4DAF19ADA5%7D

These 2 companies had been lowering their loss forecast (I won’t even say profit forecast) repeatedly and yet when their losses were announced, their stock either fell a minuscule amount or in American Express’s example, it even rallied. Fancy a stock rallying when they had just announced a loss.

Anyway back to the situation of the markets now. With bad news such as the Swine outbreak in the US, I believe the news reports would not be able to hold the markets up for long.

Direction for 04/27/2009 Monday: Gap down and down


Crude Oil (USO)

Crude and USO should be going through a period of weakness due to the Swine outbreak. There is a support at 48 for /CL and 24 for USO.

Direction for 04/27/2009 Monday: Down