Sunday, February 3, 2008

S&P 500

Follow Me on Facebook Follow Me on Tweeter

Sorry, I did not post anything during the week. I think my previous posts reflected my point of view on the current market very clearly. There were no changes - As I was expected we see the recovery, the S&P 500 and DJI have already made almost 9% up from the bottom of the January 23, 2008. The NASDAQ 100 has made less the 10%.

In spite all negative news we saw on the market, in spite of constant talking about recession, we had very strong recovery last week. To those who read CNN Money or Yahoo Finance and strongly believe that they help him/her to define the market trend I may only say “Do not read my blog… Go to CNN and Yahoo…”.

I never base my opinion about market on news and in many cases I think in opposite direction. I’m sorry I started to talk about media, but, it was so interesting to look how they tried to push everybody into Bear mood while the stock market recovered almost 10%. Does somebody asked them to do it?... Maybe those who was buying at the bottom… Starting fro January 16, 2008 we see huge volume surges and how I already mentioned several times, volume is always two sides transaction where we have a buyer and a seller – there is no doubt some group of traders was buying…

Ok, let’s go back to may charts. By looking on 1-year chart I may see the positive signals that we may see the continuation of the recent recovery. All my indicators SBV, MVO, Stochastics and MACD on this chart are rising by indicating the positive sentiment. The VIX (volatility index) is moving down on this chart and this very good as well.

Keep in mind I’m not talking about long-term market trend, there is a possibility that what we see could be a beginning of the long-term down-trend. I’m more concern now about mid-term. In order to make any statement about long term, it would be nice to see how far the market goes up before the next mid-term down move.

SP 500

Coming to the lower 60-day time-frame I still may see that the majority of the indicators I use in the positive mood. However, now we may start to see some nice volume accumulation to the index up-move, we may see that MVO started to decline by trying finishing the picture of the huge volume surge to the price up-side. We ma see that Stochastics is going to cross 70 line and RSI is already over 80. All this tell me that we are still in the Bull market, yet the possibility of the correction down is growing…

I may see that the market has some potential to turn down into correction However, I would not expect to see it until I see the SBV moving towards zero, MVO becomes zero, and Stochastics with RSI are in decline after being above 70 and 80 respectively. The biggest danger (on my point) for mid-term up-trend could come from the big volume surge we saw on Friday (February 1, 2008) – this volume surge can push market lower…

SP 500

Coming down to lower frame, to the 15-day chart (for a luck of time I’ve have not posted the snapshoot) I may say that in short term I’m not as optimistic as in mid-term. There are some strong indications that we may see down-move… It could be for a few hours, it could be for a few days… Short-term chart are very dynamic and they should be monitored in real time…

No comments: