Welcome To ThanksGiving Week!
First of all let me give thanks to all of you who have been faithfully following my blog and analysis. :)
This is a holiday shortened week where we are likely to see a stagnant market even on Friday as everyone extends their holiday through the weekend. Coincidentally, this is also a week that does not have much in the way of heavy weight news release (see economic calendar). Investors will be looking forward to indications of a bottoming in the housing market through the housing datas throughout the week, as well as an upbeat leading indicator reading in order to diminish the recessionary fears. A week like this is likely to be technical driven too. The Dow made a remarkable rebound off its 50WMA, which sets the stage for a run all the way to a new high from this point should it follow up tomorrow. The low of 13 Nov will be critical. A close below this level would totally erase the setup and set the mood for more downside.
A lot of analysts are using the amount of put options outstanding as an indication of investor sentiment, which is a HUGE mistake. Investors buy put options over all kinds of reasons and one of the most popular use of a put option is as a protective put . In a protective put, investors are still speculating to upside but adding downside protection to their portfolio! It doesn't that investors are speculating to downside at all! We really need to take such analysis with a large pinch of salt.
I will soon be hosting a podcast on Optiontradingpedia.com where I give my opinions on stocks that you guys request for! Stay tuned to that!
Dow Technical Chart By Best Charting Software TC2007!
This is a holiday shortened week where we are likely to see a stagnant market even on Friday as everyone extends their holiday through the weekend. Coincidentally, this is also a week that does not have much in the way of heavy weight news release (see economic calendar). Investors will be looking forward to indications of a bottoming in the housing market through the housing datas throughout the week, as well as an upbeat leading indicator reading in order to diminish the recessionary fears. A week like this is likely to be technical driven too. The Dow made a remarkable rebound off its 50WMA, which sets the stage for a run all the way to a new high from this point should it follow up tomorrow. The low of 13 Nov will be critical. A close below this level would totally erase the setup and set the mood for more downside.
A lot of analysts are using the amount of put options outstanding as an indication of investor sentiment, which is a HUGE mistake. Investors buy put options over all kinds of reasons and one of the most popular use of a put option is as a protective put . In a protective put, investors are still speculating to upside but adding downside protection to their portfolio! It doesn't that investors are speculating to downside at all! We really need to take such analysis with a large pinch of salt.
I will soon be hosting a podcast on Optiontradingpedia.com where I give my opinions on stocks that you guys request for! Stay tuned to that!
Dow Technical Chart By Best Charting Software TC2007!
Labels: dow, fundamental analysis, technical analysis, us economy, us market
posted by Jason Ng at 5:01 PM
1 Comments:
Jason,
I think I'll have to disagree with you about the Dow. I'm seeing too much negativity in OBV and ADX/DMI in both the daily and weekly charts to believe the Dow will make a new high. Additionally, the monthly MACD on the composite has made a cross Also, given the sub-prime/Alt-A problems in Citi and others along with falling consumer sentiment and the cutting back of discretionary spending, I simply can't see any news on the horizon that would give the Dow any positive energy.
Ray
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