The Reaction Rally Begins...
TECHNICAL ANALYSIS
Today, I decided to put technical analysis right up front... for obvious reasons. ;-) The reaction rally that I have been talking about for the entire week seems to begin at last after rebounding off the August low intraday yesterday like I predicted it will. Here's the catch... reaction rallies are sometimes known as Dead Cat Bounces. The Dow continues to be range bound within a declining short term channel. The test of the 30WMA at about 13400 will be critical. So, Yes, I do think the market is going to go up for now, at least to 13400. In fact, I just closed out all my profitable put options positions today.
FUNDAMENTAL ANALYSIS
Coincidentally, a number of fundamental reasons collided today to produce the rebound off that August low I mentioned above. Jobless claims are down 15,000 to 2 months low, retail sales are ok, crude oil retreats intraday plus a Bernanke speech that seems to say that he getting out from under the rock at last. However, lets not forget that 67% of the retailers missed expectations and that Walmart's earnings are surging, indicative of consumers moving from luxury to better prices which does suggest that consumer spending power has indeed been affected so far. More rate cuts?? What this economy needs is some FISCAL POLICY, not more MONETARY POLICY! Give small businesses TAX CUTS and stop feeding the market with rate cuts! Tax cuts increases employment, spending power and consequently earnings without the drawback of immediate inflation! Tax cuts, not rate cuts, will cure this economy.
Today, I decided to put technical analysis right up front... for obvious reasons. ;-) The reaction rally that I have been talking about for the entire week seems to begin at last after rebounding off the August low intraday yesterday like I predicted it will. Here's the catch... reaction rallies are sometimes known as Dead Cat Bounces. The Dow continues to be range bound within a declining short term channel. The test of the 30WMA at about 13400 will be critical. So, Yes, I do think the market is going to go up for now, at least to 13400. In fact, I just closed out all my profitable put options positions today.
FUNDAMENTAL ANALYSIS
Coincidentally, a number of fundamental reasons collided today to produce the rebound off that August low I mentioned above. Jobless claims are down 15,000 to 2 months low, retail sales are ok, crude oil retreats intraday plus a Bernanke speech that seems to say that he getting out from under the rock at last. However, lets not forget that 67% of the retailers missed expectations and that Walmart's earnings are surging, indicative of consumers moving from luxury to better prices which does suggest that consumer spending power has indeed been affected so far. More rate cuts?? What this economy needs is some FISCAL POLICY, not more MONETARY POLICY! Give small businesses TAX CUTS and stop feeding the market with rate cuts! Tax cuts increases employment, spending power and consequently earnings without the drawback of immediate inflation! Tax cuts, not rate cuts, will cure this economy.
Labels: fundamental analysis, technical analysis
posted by Jason Ng at 4:13 PM
1 Comments:
very impressive call, Jason. I Follow your analysis religiously.
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