Recap for the month of January and market analysis for 05/02/2010 by Singaporeseeds

Recap for the month of January

This is from my market analysis for 20/01/2010 where i said that we were going DOWN:

My Market Analysis for 20/01/2010

The market bounced off my supports yesterday. But it seemed to be too little and with the financials looking weak, I do not think this bounce will follow through today. I’m still sticking with my analysis that the markets are just gyrating with increasingly bigger swings due to the earnings season. We should breakout of this range that the indexes had been in since the start of the year sometime late this week. Currently there are more indicators pointing to a break downwards rather than a break upwards.

I believe that we have passed the high of the month already and from now on, it should be sideways and down.

As you can see from the charts below, we did break out (break down actually) of the range that the markets had been in later in the week and i called the high at exactly the peak of the market on the 19th Jan 2010. With the exception of the first day of Feb when i took off my positions to roll them, I've been short the markets everyday since then.

Daily chart of the Dow


Daily chart of S&P


Daily chart of Nasdaq



Market Analysis for 05/02/2010

Now with the bounce back to the 50 day MAs technically over, we are going to continue with the current trend down. However two big factors that will affect the markets tonight will be the US non-farm payrolls and the Europe debt situation. My indicators are showing a slightly oversold situation with an interesting pattern. To me, there’s two ways to interpret this:

1) We are done with the tank and will be bouncing up soon.
2) The tank over the past few days is just the tip of the iceberg.

However looking at the momentum of the tank, I think I’ll prefer the 2nd option. But the Dow closed right on the psychological 10,000 level last night so this means that:

1) We might be either bouncing a bit today
2) We will break right through the 10,000 level like a brick thrown in water.

Ok, enough of choices. I believe we would be going flat or down but a lot depends on the results of the non-farm payroll tonight.