Waiting for a Breakout – Market Analysis for 2nd August 2010 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


All 3 indexes are setting up for a bullish breakout with a target at 1,150 for the S&P. However we are still below the 200 day moving average and with the Macclellan Oscillator so high (at 300 last Monday) there might be a few more days of market weakness. I’m looking at the market to dip a bit more (no lower than 1,080 for the S&P) and then continue the rally to 1,150.

Start of the 3rd Wave Down – Market Analysis for 19th July 2010 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


On Friday, we’ve got the 200+ points drop on the Dow that I had been expecting since Thursday. The market went more or less straight down the whole day and closed below their 20 & 50 day moving averages and their upper MOBO bands. This caused all 3 indexes to form ice hole failures at the 50 and 200 day moving average. It also formed a ugly looking evening star candlestick pattern which indicates a trend reversal down.

Currently, this downtrend is still looking strong to me. We are making lower highs and lower lows without any bullish divergence. This means that the possibility of a 3rd wave down is still high. This would be at 950 on the S&P.

PS: I just remembered something that i learnt from David Elliot. He discovered a reliable candlestick pattern called the Shanghai Duo. Its a doji followed by a hanging man (this would be a hammer for a downtrend reversal) with confirmation the next day. It seems that all 3 indexes closed with this candlestick pattern on Friday.

The Bounce is Over – Market Analysis for 15th July 2010 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


This is it. All 3 indexes have their 50 day moving average crossing below their 200 day moving average. (on my chart, it’s the red line crossing below the green line) I just found out that the name for this moving average crossing is called the Death Cross. Dow and S&P made this cross last week, and NASDAQ only did it yesterday.

Last night we made a doji candlestick pattern and with NASDAQ also making the death cross, I believe that the bounce is over. If today also closes down, it will be confirmation of the continuation of the downtrend. We might continue to move sideways in a volatile fashion (this is due to earnings season) but i'm not expecting the stock market to break above their respective 50 and 200 day moving averages. My target for this downtrend would be at 950 for the S&P.

Citibank Mid-Year Outlook at the Ritz Carlton on the 8th July 2010

Prefer bonds over equity
Positive investment grade bonds, prefer Emerging market Sovereign and high yield bonds
Prefers US & North Asian Equity markets

US & North Asian Equities, Global healthcare
Emerging market consumerism & hedge funds

S&P trailing price to book value and trailing price to earnings ratio is currently below 15 year average

Continue to expect sustained but uneven global economic recovery. Europe to be weakest link, Asia ex Japan to be area of strongest growth

Global inflation to remain subdued

Anticipate USD to remain range bound against G7 currencies. Asian units to continue modest appreciation trend.

Asia equities to outperform global equities in a volatile environment

Real assets (gold/oil) will become more attractive in a fiscally irresponsible world.

Nice Bounce! - Market Analysis for 12th July 2010 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


The bounce did come and it was stronger then i expected. Usually market bounces after a downtrend tend to be fast and furious. Some bounces would gain momentum and continue to become the start of a rally. This has not happened as volume had been decreasing everyday since the bounce began last week.

With the start of earnings season today, i would expect some upside momentum in the next few days. However we are still below the 50 and 200 day moving average and for Dow and S&P, the 50 day moving average had crossed the 200 day moving average. This is a very bearish signal for the market. And I believe the same would happen for NASDAQ over the next 2-3 days. So do not jump into any long positions unless the individual stock is a very beaten down one. One example would be BP.

Are we going to bounce or not? – Market Analysis for 7th July 2010 by Singaporeseeds

Daily chart with head and shoulders pattern for Dow


Daily chart with head and shoulders pattern for S&P


Daily chart with head and shoulders pattern for NASDAQ


The market made a brave attempt to bounce above my first resistance which is the lower MOBO bands in pre-market hours (it feels like the Plunge Protection Team) but failed miserably soon after the market opened. All 3 indexes closed right below the MOBO bands. This indicates bearish momentum.

All 3 indexes are also showing a head and shoulders pattern on daily with a downside target of around 900 for the S&P. Currently my downside target is only until 950 as indicated by Fibonacci retracement.

I believe we are not ready to bounce yet and that there should be a few more days of downside. However I’m seeing a bullish setup being formed that would have to be confirmed by a bullish candle for today and maybe tomorrow. We shall see how this turns out.

US Unemployment Report Out Today – Market Analysis for 2nd July 2010 by Singaporeseeds

Daily chart for Dow


Daily chart for S&P


Daily chart for NASDAQ


The Non Farm Employment Report will be out at 8.30pm Singapore time. Such an important report after 2 consecutive weeks of blood on Wall Street will definitely move the market big time in either direction. If it is good, we will bounce to test resistance at 1050, if it is bad… well good luck to those still holding onto long positions.

Personally I believe that the report will be good but this is just a guess. However I do not wish to put my money where I am not confident of my odds so I had taken all of them off the table. With the market moving so much and so fast down in my favour, I’ve gained a lot of negative deltas that I felt it was no longer worth the risk to ride through the Non-Farm Payroll with my current positions. This had been a good 2 weeks so I’m going to take a well deserved break this weekend.

Daily chart for Gold


Gold is still testing support and not ready to rally. Usually gold spikes when the market goes through a downturn like this but it may lag the market by 1-2 weeks.