Market Analysis for 11/30/2009

In addition onto my report 2 weeks ago of the market reaching a turning point, all the major US banks in the US had been trending down since 2 weeks ago. It was as if they were anticipating some kind of catastrophe occurring way before it actually happened.

However a look at the 3 major indexes in the US now, we can see that all the major indexes are still in a bullish setup.

Dow Daily



Dow is the most bullish of the indexes. It needs to break and stay below the psychological support of 10,000 for the market to be considered bearish.

S&P Daily



Needs to break and stay below 1,073 to be considered bearish.

NASDAQ Daily



NASDAQ is considered the most bearish of the indexes and it is still slightly above the 50 day moving average which is acting as a strong support. It needs to break and stay below 2,130 to be considered bearish.

There is a good chance that the markets may bounce off their respective supports and continue rallying. However the momentum of this rally had been fading out for weeks and a correction had been long overdue. The non farm payroll will be out next week and the market’s perception of it should greatly affect the markets, especially since its in an undecided state now.

Back in Singapore!

Couldn't log onto blogspot for the 2 whole weeks while i was in China. Btw, blogspot is one of the websites currently banned there.

This is what i wrote while in the first few days while i was there;

Market Analysis for last week of Nov

I’m currently in China and not able to access the internet everyday. However with the help of my bro Chris, I’ve been able to keep up with the movements of the market with his daily sms.

I believe the market is currently at a turning point. The Dow and S&P are constipating at the 50 day moving averages and with these indexes’ 20 day and 50 day moving average moving so closely together, the market is clearly undecided where to go from here. I believe we will be experiencing a market correction soon but we may need a few more days for the sentiment to change and determine the direction of the market.

5th Elliot wave now?

I've been looking at the Elliot wave formation of the indexes for a while now and there seems to be stonger evidence that the rally is dying out. There should be a serious tank or at least a pullback coming soon. And the market has been constipating for the past 2 days. Looks like it's anticipating some major news and awaiting confirmation before starting a new trend.

Elliot wave formation for the longer term


Elliot wave formation of this rally from March 09

Market Analysis for 11/11/2009

After yesterday’s lackluster session, I believe the indexes are ripe for a pullback. I’m currently out of all positions waiting for this pullback. Even oil and gold seemed to have overshot and are losing momentum.

Market Analysis for 10/11/2009

Daily chart for the Dow


Daily chart for the S&P


Daily chart for NASDAQ


The Dow and S&P will be meeting some resistance at the 500 day moving average soon. (purple line) Only the NASDAQ seems to be good for a short rally after having bounced off the 20 and 50 day moving averages. (blue and red lines)

I think we should have 1-2 more days of bullishness before a dip. Whether this rally can continue will depend on the indexes staying above their respective 50 day moving averages.

Note: I still stand by my prediction of the Dow closing below 9,035 by end of the year. That’s more than 1,000 points from where we are now.

Market Analysis for 09/11/2009

I finally got back home to do my market analysis! The USD is on a downtrend for the whole day now and with the indexes being inversely affected by it, the market is bond to rally. The Dow broke previous high and the S&P broke up back into the wedge. I’m expecting both indexes to run for 2-3 more days with any dips being buying opportunities into this uptrend.

Market Analysis on the Dow And S&P for 06/11/2009

I finally got back home after a long day of work. Although the non-farm payroll was bad, the market dipped and rallied back up. This indicates that the market is still bullish and not ready for the major tank. Btw, I believe that the market is now on the last leg of a rally (target at around 1,120 on the S&P) and the sentiment may turn soon.

Dow daily chart



S&P daily chart



Although the S&P seems to have broken the trend line (and also the wedge) everything seems to be intact on the Dow. Usually both of them have to move together for the movement to be a significant one.

I believe that both the Dow and S&P are poised to hit the 50% mark before turning back down for a nasty tank.

Elliot wave on the Dow



This is the Elliot wave counting on the Dow. We are going to go down soon baby!

10 REASONS TO BE BEARISH

1) RISING UNEMPLOYMENT RATE -once it goes past the psychological level of 10%, we will likey see some strong reaction in the markets

2) CONTINUING BANK FAILURES - Banks are continuing to fail despite all the talk about recovery, the latest being CIT.

3) INCREASING COMMERCIAL PROPERTY DEFAULTS - were up 200% in the period from Jan 2009 to June 2009 as compared to the whole day of 2008. Surely increasing commerical property defaults indicates that the commercial sector has not recovered.

4) INCREASING HOUSING DEFAULTS - foreclosures and defaults are still rising

5) EXPENSIVE GOLD - Gold, the safe haven for investors is at an all time high and just broke 1,000. If there is a recovery then why are investors still keeping their money in gold?

6) HIGH CRUDE OIL PRICES AND THE HUGE DIVERGENCE BETWEEN CRUDE AND NATURAL GAS - Natural gas is usually used by the manufacturing sector and indicates the health of the manufacturing sector. The fact that Natural gas is at an all time low while crude oil is at a high indicates the weakness of the manufacturing sector in an environment of growing inflationary fears.

7) ULTRA LOW INTEREST RATES - as long as the interest rates stay down, we can be sure that the worst is not over.

8) EARNINGS ESTIMATES & ANNOUCEMENTS - seems like a whole lot of companies had beat earnings but they had forgotten to announce that their earnings estimates had been revised to such a low level that it is impossible not to beat it. And most of the revenues of the companies had actually decreased YOY.

9) FRE, FNM, AIG & C - With only 4 companies making up 25% of the stock activity in the market, this market rally is too biased for it to be an accurate reflection of the economy.

10) LOW VOLUMES - market volume is still low and with only 4 companies dominating the stock market activity, the market may spike in either directions (usually down) when market volume returns.

Dow and S&P market analysis for 02/11/2009

Wedge on the Dow



Wedge on the S&P



The wedge, as indicated by the 2 red lines shows the decreasing volatility that the indexes are going through. Usually, this indicates the calm before the storm. Whichever way that the indexes break out of the wedge, it may run in that direction for a while. In this instance, I believe there is a high chance that the indexes may break down. This rally had lasted way too long and a correction is long overdue.