Anyone expecting a market turn this week or is it still heading down?

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I am not a registered broker so please buy and sell on your own choice. My posts my opinions and should not be used for buy/sell signals. Please check out disclaimer for any market awareness for any of the above mentioned stocks.

IMO we should see it bounce off of the 11700-11750 area this week,support has held in that area 4 times in the last year.could be we are going to trade sideways for awhile between 11700 and 13200 areas untill we get our economy straightend out.we seem to be at the bottom of the three month cycle here.

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good technicals loniee... i wonder if the election will support an uptrend this summer...???

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I am not a registered broker so please buy and sell on your own choice. My posts my opinions and should not be used for buy/sell signals. Please check out disclaimer for any market awareness for any of the above mentioned stocks.

Wouldn't the uncertainty support the side ways tradeing pattern?

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I came,I played,and I WILL take some with me

Stock Tiger Stalking Stocks™

For Monday June 23, 2008

Hello loniee,



Past 5 days

Dow

Nasdaq



Close Friday

Dow -220.40 at 11842.69, Nasdaq -55.97 at 2406.09, S&P -24.90 at 1317.93

Summer Solstice (well winter solstice if you live down under) but for those in the top half of the world it is the official start of summer as the sun is directly over the Tropic of Cancer in the Northern Hemisphere, the farthest north it goes before returning back down south. (of course it is not the sun but our relationship to it) This date has been celebrated for thousands of years and perhaps it will mark a market turning point also.

Friday was options expiration so higher volume and it was on the downside. I guess the theme of the day was financial worries and Merrill Lynch reduced its earnings estimates for several banks. Ford will cut more truck production.

On a non related note I read that Treasury Secretary Henry M. Paulson Jr. plans to call today for the Federal Reserve to be given new, explicit powers to intervene in the workings of Wall Street firms to protect the financial system, adapting his vision of how the financial world should be regulated to reflect the lessons of the collapse of Bear Stearns. Yikes - that is scary - The Fed is controlled by banks that operate for a profit and they have done a horrible job and now they want even more power to "protect the financial system". Some instead wish them to be eliminated all together.

The Labor Department reported that the number of individuals claiming for unemployment benefits declined 5,000 in the week ended June 14th to 381,000 from the previous week's revised figure of 386,000.

Vincent Farrell Jr. a commentator on markets about the claims report said, "..it is still-acceptable 375,000. Remember, 400,000 for an average would be consistent with 0% GDP, so we still look to be growing sluggishly." So to him adding 400,000 new unemployed each week still shows growth. He could get a job with the government.



For the week of the indices shown only gold was up.




I read someone's comment: "The most frightening thing about this market right now is how bleak the technical picture looks. The Dow is very close to the March lows, the S&P500 is getting there fast, and if the Nasdaq and Russell 2000 play catch-up to the downside, it's going to be a world of hurt in small-caps and technology names. There is very little if any support, and the bulls best hope is for an oversold bounce that somehow gains momentum, and that is a bad bet."

This worry is being shown in confidence readings that often are a good contrary indicator and can help spot market lows.

Sentimentrader.com has a Smart Money/Dumb Money confidence indicator and it shows that the average investor continues to be overly pessimistic on the market and that has pushed this indicator down to a low of 33%, which is the lowest level since March.

Historically, when readings hit this level, the market has responded fairly well. However, an analyst at sentimentrader.com says that the best short-term edges happen when this indicator drops to 20% or below.



I read that at the January low there were 1114 new lows on the NYSE and at the March low there were 759 new lows and on Friday only 275 new lows so no panic in general.

This is the percentage of the 30 Dow industrial stocks that are trading over their 50-day moving average. On Friday it hit Zero as all are now below their 50-day for the first time since February in 2003. In the lower section is the Dow and you see the rally that started the last time it hit zero. Mike Burk pointed out that in the past these zero readings came very close to market bottoms. (ignore stochastics)


In the S&P 500, 36% of stocks are currently trading above their 50-day moving averages. A healthy market typically has more than 50% of stocks above their 50-days, so current levels are weak as we know. But they can no doubt get weaker. Other averages and the percent of stocks still over their 50-day average- S&P500 17.5%, S&P 400 Mid cap 32.0%, NYSE 32.0% and Russell 2000 (R2K) 43.1%.

The Bank Index tested its 2002 low and is oversold via stochastics and RSI.



30 Year bond yield pulled back some this week to 4.7% but still above their trend line and major moving averages. We must figure that rates will remain going up now as something must be done to fight inflation. While the government loves to claim low inflation of under 4%, NBC news on Friday said that in May food prices alone across the country were up 7% for the month on top of a 5% rise in April.



Many indexes look weak and if we do enter a real bear market they could drop a lot but there is something new since the start of the bear in 2000. Most private investors and many funds do not short stocks. Many IRAs or other plans do not even allow this. As a result many investors stayed long during the several year decline and had large losses that took years more to make back. Now with the great number of short ETFs everyone can short stocks or indices easily so no one has to sit and suffer draw downs if entering a bear market. If you are on the fence you can hedge any open long positions with shorts (using short ETFs) so you at least keep even. DXD is the ETF for shorting the Dow and it is at a trend line now and over extended so caution if you own it. It has rallied nicely from the May low though a break out could take it to the $62 level.

__________________
I came,I played,and I WILL take some with me