According to my bro Chris and his new found Demark technique, the current uptrend had ended last night. (Demark predicts turning points and trend terminations quite accurately) This has been further confirmed by the dojis that kept forming and the volatile behaviour of the market these days. Markets behave in a more volatile way close to the end of the trends, regardless of whether it is an uptrend or downtrend.
I'm now looking for the indexes to break the 20 day MA support and then the 50 day MA support. Once the 50 MA is broken, it is then that the downtrend will be confirmed.
Thursday, August 27, 2009
Thursday, July 23, 2009
Thoughts about this crazy rally...
This rally is crazy! All the talk about the market recovering and that we are out of the recession. This is just a bear trap waiting to consume everyone who are ignorant enough.
Anyway the McClellan Oscillator is edging up. It is currently at 217 now which is indicating that this current rally is running out of steam. Even if it continues to rally, it would have to dip and then rally in a wavelike manner. My opinion is that it would dip and then crash. We shall see in 1-2 weeks time whether this rally has legs.
Anyway the McClellan Oscillator is edging up. It is currently at 217 now which is indicating that this current rally is running out of steam. Even if it continues to rally, it would have to dip and then rally in a wavelike manner. My opinion is that it would dip and then crash. We shall see in 1-2 weeks time whether this rally has legs.
Tuesday, July 14, 2009
Dow & S&P 500 market analysis for 07/14/2009 Tuesday
Dow & S&P 500 market analysis
We are now in a crucial stage of the market movement. Any big movement up will signal the continuation of the rally since March 09, and any big movement down will signal the end of the rally and also a confirmation a down movement that started from mid June 09 that may bring us to retest the March lows. However by looking at the behavior of the market, I’m in favour of a market tank down to retest the March lows.
But for this tank to happen, the market has to fail to break above 910 for S&P and 8476 for the Dow. So my market analysis for today will be up, to test the resistances.
Direction for 07/14/2009 Tuesday: Up
Crude Oil (USO)
Crude should be going through a period of consolidation between 59.30 to 62 for the rest of the month. The setup of crude seems to indicate a down movement which may bring crude back down to 53 and maybe beyond.
Direction for 07/14/2009 Tuesday: sideways
We are now in a crucial stage of the market movement. Any big movement up will signal the continuation of the rally since March 09, and any big movement down will signal the end of the rally and also a confirmation a down movement that started from mid June 09 that may bring us to retest the March lows. However by looking at the behavior of the market, I’m in favour of a market tank down to retest the March lows.
But for this tank to happen, the market has to fail to break above 910 for S&P and 8476 for the Dow. So my market analysis for today will be up, to test the resistances.
Direction for 07/14/2009 Tuesday: Up
Crude Oil (USO)
Crude should be going through a period of consolidation between 59.30 to 62 for the rest of the month. The setup of crude seems to indicate a down movement which may bring crude back down to 53 and maybe beyond.
Direction for 07/14/2009 Tuesday: sideways
Friday, July 10, 2009
Dow & S&P 500 market analysis for 07/10/2009 Friday
Dow & S&P 500 market analysis
The S&P tanked throughout the week after breaking the 50 day MA. However we are now looking at a possible retracement to test resistance at around the 890-900 region if this tank is to be sustainable. This should be sometime next week. In the short term (1-2 months), I’m expecting S&P to rally to the 890-900 region and then tank to around 840. Longer term, I expect S&P to test the Feb 09 bottom by the end of the year.
Direction for 07/10/2009 Friday: Up
Crude Oil (USO)
I believe Crude had hit support at 59.60. It should consolidate for a few days before rallying up to test resistance at 62.20. This should take 2-3 weeks. Longer term, I believe crude should tank. The current level at 60+ is fundamentally unsustainable.
Direction for 07/10/2009 Friday: Up
The S&P tanked throughout the week after breaking the 50 day MA. However we are now looking at a possible retracement to test resistance at around the 890-900 region if this tank is to be sustainable. This should be sometime next week. In the short term (1-2 months), I’m expecting S&P to rally to the 890-900 region and then tank to around 840. Longer term, I expect S&P to test the Feb 09 bottom by the end of the year.
Direction for 07/10/2009 Friday: Up
Crude Oil (USO)
I believe Crude had hit support at 59.60. It should consolidate for a few days before rallying up to test resistance at 62.20. This should take 2-3 weeks. Longer term, I believe crude should tank. The current level at 60+ is fundamentally unsustainable.
Direction for 07/10/2009 Friday: Up
Sunday, July 5, 2009
Dow & S&P 500 market analysis for 07/06/2009 Monday
I'm finally back after a long absence. Was travelling Europe. Went to England, Scotland, France and Gerrmany and learnt a great deal.
Anyway the market from then till now had not changed much. It's still in a sideways movement though it seemed to be breaking down soon. We have what seems to be a head and shoulders formation on the indexes, and now we are all monitoring to see if it would break support at around 882 on the S&P and 8245 on the Dow.
If this support breaks, we will see some retracement and then it's down to 800 for S&P and 7500 for Dow. And should it break these 2 important support levels on the indexes, it should not take more than a month to complete the head and shoulders.
Anyway the market from then till now had not changed much. It's still in a sideways movement though it seemed to be breaking down soon. We have what seems to be a head and shoulders formation on the indexes, and now we are all monitoring to see if it would break support at around 882 on the S&P and 8245 on the Dow.
If this support breaks, we will see some retracement and then it's down to 800 for S&P and 7500 for Dow. And should it break these 2 important support levels on the indexes, it should not take more than a month to complete the head and shoulders.
Tuesday, May 12, 2009
On the flight to UK!
I will be going off to UK today. Hence i might be unable to post any DMA during this time. I will be back if i can get a stable internet connection there.
Monday, May 11, 2009
Banks Won Concessions on Tests - Fed Cut Billions Off Some Initial Capital-Shortfall Estimates; Tempers Flare at Wells
By DAVID ENRICH, DAN FITZPATRICK and MARSHALL ECKBLAD
The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.
In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.
The overall reaction to the stress tests, announced Thursday, has been generally positive. But the haggling between the government and the banks shows the sometimes-tense nature of the negotiations that occurred before the final results were made public.
Government officials defended their handling of the stress tests, saying they were responsive to industry feedback while maintaining the tests' rigor.
Interactives: Compare Banks Tested
View Interactive
Bank by Bank Findings
View Interactive
More interactive graphics and photos When the Fed last month informed banks of its preliminary stress-test findings, executives at corporations including Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were furious with what they viewed as the Fed's exaggerated capital holes. A senior executive at one bank fumed that the Fed's initial estimate was "mind-numbingly" large. Bank of America was "shocked" when it saw its initial figure, which was more than $50 billion, according to a person familiar with the negotiations.
At least half of the banks pushed back, according to people with direct knowledge of the process. Some argued the Fed was underestimating the banks' ability to cover anticipated losses with revenue growth and aggressive cost-cutting. Others urged regulators to give them more credit for pending transactions that would thicken their capital cushions.
At times, frustrations boiled over. Negotiations with Wells Fargo, where Chairman Richard Kovacevich had publicly derided the stress tests as "asinine," were particularly heated, according to people familiar with the matter. Government officials worried San Francisco-based Wells might file a lawsuit contesting the Fed's findings.
The Fed ultimately accepted some of the banks' pleas, but rejected others. Shortly before the test results were unveiled Thursday, the capital shortfalls at some banks shrank, in some cases dramatically, according to people familiar with the matter.
Bank of America's final gap was $33.9 billion, down from an earlier estimate of more than $50 billion, according to a person familiar with the negotiations.
A Bank of America spokesman wouldn't comment on how much the previous gap was reduced, though he said it resulted from an adjustment for first-quarter results and errors made by regulators in their analysis. "It wasn't lobbying," he said.
Wells Fargo's capital hole shrank to $13.7 billion, according to people familiar with the matter. Before adjusting for first-quarter results and other factors, the figure was $17.3 billion, according to a federal document.
"In the end we agreed with the number. We didn't necessarily like the number," said Wells Fargo Chief Financial Officer Howard Atkins. He said the company was particularly unhappy with the Fed's assumptions about Wells Fargo's revenue outlook.
At Fifth Third Bancorp, the Fed was preparing to tell the Cincinnati-based bank to find $2.6 billion in capital, but the final tally dropped to $1.1 billion. Fifth Third said the decline stemmed in part from regulators giving it credit for selling a part of a business line.
Citigroup's capital shortfall was initially pegged at roughly $35 billion, according to people familiar with the matter. The ultimate number was $5.5 billion. Executives persuaded the Fed to include the future capital-boosting impacts of pending transactions.
Stress Test: Complete Coverage
Wells, Morgan Stanley Quickly Raise $11 Billion WSJ.com/Finance: More stress test news Vote and Discuss
Do the stress test results paint an accurate picture of the financial industry? Weigh in at WSJ.com/Community SunTrust Banks Inc. also persuaded the Fed to significantly reduce the size of its estimated capital gap to $2.2 billion, after identifying mathematical errors in the Fed's earlier calculations, according to a person familiar with the matter.
PNC Financial Services Group Inc., saw a capital hole materialize at the last minute. As recently as Wednesday, PNC executives were under the impression they wouldn't need to find any new capital, according to people familiar with the matter. Thursday morning, the Fed informed PNC that it had a $600 million shortfall.
Regulators said other banks also were told they needed more capital than initially projected.
The Fed's findings were less severe than some experts had been bracing for. A weeklong rally in bank stocks continued Friday, with the KBW Bank Stocks index surging 10%. Investors were especially relieved by the relatively small capital holes at regional banks. Shares of Fifth Third soared 59%, while Regions Financial Corp.'s $2.5 billion deficit led to a 25% leap in its stock.
With the stress tests, government officials were walking a fine line. If the regulators were too tough on banks, they risked angering their constituents and spooking markets. But if they were too soft, the tests could have lost credibility, defeating their basic confidence-building purpose.
All the back-and-forth is typical of the way regulators traditionally wrap up their examinations of banks: Regulators often present preliminary findings to lenders and then give them time to respond. The process can result in changes to the regulators' initial conclusions. Some of the stress-test revisions, for instance, were made to account for the beneficial impact of the industry's strong first-quarter profits.
On Friday, some analysts questioned the yardstick, known as Tier 1 common capital, that regulators chose to assess capital levels. Many experts had assumed the Fed would use a better-known metric called tangible common equity.
According to Gerard Cassidy, an analyst with RBC Capital Markets, the 19 banks' cumulative shortfall would have been more than $68 billion deeper if the government had used the latter metric, which accounts for unrealized losses.
Federal officials said their projections reflected the most comprehensive analysis ever conducted of the industry.
The test results showed that the 19 banks faced a total of $599 billion in losses over the next two years under the government's worst-case, Depression-like scenario. The Fed directed 10 banks to add a total of nearly $75 billion to their capital buffers to insulate themselves from potential losses.
Banks pressed ahead on Friday with plans to fill their capital holes by tapping public markets. Wells Fargo raised $7.5 billion in stock through a public offering. The bank originally planned to raise $6 billion, but expanded the offering, which was valued at $22 a share, due to robust demand. Shares of Wells Fargo rallied $3.42, or 14% to $28.18.
Morgan Stanley, which is facing a $1.8 billion capital hole, raised $4 billion by selling stock. Shares of Morgan rose $1.06, or 4%, to $28.20.
The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.
In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.
The overall reaction to the stress tests, announced Thursday, has been generally positive. But the haggling between the government and the banks shows the sometimes-tense nature of the negotiations that occurred before the final results were made public.
Government officials defended their handling of the stress tests, saying they were responsive to industry feedback while maintaining the tests' rigor.
Interactives: Compare Banks Tested
View Interactive
Bank by Bank Findings
View Interactive
More interactive graphics and photos When the Fed last month informed banks of its preliminary stress-test findings, executives at corporations including Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were furious with what they viewed as the Fed's exaggerated capital holes. A senior executive at one bank fumed that the Fed's initial estimate was "mind-numbingly" large. Bank of America was "shocked" when it saw its initial figure, which was more than $50 billion, according to a person familiar with the negotiations.
At least half of the banks pushed back, according to people with direct knowledge of the process. Some argued the Fed was underestimating the banks' ability to cover anticipated losses with revenue growth and aggressive cost-cutting. Others urged regulators to give them more credit for pending transactions that would thicken their capital cushions.
At times, frustrations boiled over. Negotiations with Wells Fargo, where Chairman Richard Kovacevich had publicly derided the stress tests as "asinine," were particularly heated, according to people familiar with the matter. Government officials worried San Francisco-based Wells might file a lawsuit contesting the Fed's findings.
The Fed ultimately accepted some of the banks' pleas, but rejected others. Shortly before the test results were unveiled Thursday, the capital shortfalls at some banks shrank, in some cases dramatically, according to people familiar with the matter.
Bank of America's final gap was $33.9 billion, down from an earlier estimate of more than $50 billion, according to a person familiar with the negotiations.
A Bank of America spokesman wouldn't comment on how much the previous gap was reduced, though he said it resulted from an adjustment for first-quarter results and errors made by regulators in their analysis. "It wasn't lobbying," he said.
Wells Fargo's capital hole shrank to $13.7 billion, according to people familiar with the matter. Before adjusting for first-quarter results and other factors, the figure was $17.3 billion, according to a federal document.
"In the end we agreed with the number. We didn't necessarily like the number," said Wells Fargo Chief Financial Officer Howard Atkins. He said the company was particularly unhappy with the Fed's assumptions about Wells Fargo's revenue outlook.
At Fifth Third Bancorp, the Fed was preparing to tell the Cincinnati-based bank to find $2.6 billion in capital, but the final tally dropped to $1.1 billion. Fifth Third said the decline stemmed in part from regulators giving it credit for selling a part of a business line.
Citigroup's capital shortfall was initially pegged at roughly $35 billion, according to people familiar with the matter. The ultimate number was $5.5 billion. Executives persuaded the Fed to include the future capital-boosting impacts of pending transactions.
Stress Test: Complete Coverage
Wells, Morgan Stanley Quickly Raise $11 Billion WSJ.com/Finance: More stress test news Vote and Discuss
Do the stress test results paint an accurate picture of the financial industry? Weigh in at WSJ.com/Community SunTrust Banks Inc. also persuaded the Fed to significantly reduce the size of its estimated capital gap to $2.2 billion, after identifying mathematical errors in the Fed's earlier calculations, according to a person familiar with the matter.
PNC Financial Services Group Inc., saw a capital hole materialize at the last minute. As recently as Wednesday, PNC executives were under the impression they wouldn't need to find any new capital, according to people familiar with the matter. Thursday morning, the Fed informed PNC that it had a $600 million shortfall.
Regulators said other banks also were told they needed more capital than initially projected.
The Fed's findings were less severe than some experts had been bracing for. A weeklong rally in bank stocks continued Friday, with the KBW Bank Stocks index surging 10%. Investors were especially relieved by the relatively small capital holes at regional banks. Shares of Fifth Third soared 59%, while Regions Financial Corp.'s $2.5 billion deficit led to a 25% leap in its stock.
With the stress tests, government officials were walking a fine line. If the regulators were too tough on banks, they risked angering their constituents and spooking markets. But if they were too soft, the tests could have lost credibility, defeating their basic confidence-building purpose.
All the back-and-forth is typical of the way regulators traditionally wrap up their examinations of banks: Regulators often present preliminary findings to lenders and then give them time to respond. The process can result in changes to the regulators' initial conclusions. Some of the stress-test revisions, for instance, were made to account for the beneficial impact of the industry's strong first-quarter profits.
On Friday, some analysts questioned the yardstick, known as Tier 1 common capital, that regulators chose to assess capital levels. Many experts had assumed the Fed would use a better-known metric called tangible common equity.
According to Gerard Cassidy, an analyst with RBC Capital Markets, the 19 banks' cumulative shortfall would have been more than $68 billion deeper if the government had used the latter metric, which accounts for unrealized losses.
Federal officials said their projections reflected the most comprehensive analysis ever conducted of the industry.
The test results showed that the 19 banks faced a total of $599 billion in losses over the next two years under the government's worst-case, Depression-like scenario. The Fed directed 10 banks to add a total of nearly $75 billion to their capital buffers to insulate themselves from potential losses.
Banks pressed ahead on Friday with plans to fill their capital holes by tapping public markets. Wells Fargo raised $7.5 billion in stock through a public offering. The bank originally planned to raise $6 billion, but expanded the offering, which was valued at $22 a share, due to robust demand. Shares of Wells Fargo rallied $3.42, or 14% to $28.18.
Morgan Stanley, which is facing a $1.8 billion capital hole, raised $4 billion by selling stock. Shares of Morgan rose $1.06, or 4%, to $28.20.
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