Stock Market Analysis

Thursday, May 29, 2008

Bulls Reclaims Lost Ground!

The bulls continued their rally today and reclaimed another 52.19 points of lost ground as crude oil prices took a beating due to a surprisingly large drop in demand by 5.5%! Yes, this was what I was talking a few days ago about how demand might drop faster than the drop in supply! As long as all of us do our bit to conserve energy, oil traders cannot take us for a ride! There was obvious panic amongst oil traders today as a larger than expected drop in oil reserve failed to provide any optimism. In fact, oil traders are taking a very defensive stance now as new oil reserves arrive in the States in June. A top up in supply along with a steadily declining demand makes for lower prices in the near future. I am hawkish on oil for the short term but hold longer term bullish view on oil until an alternate energy source becomes mainstream. For now, the stock market merely needed a short term drop in oil prices in order to fuel the growing optimism and to start a sustainable intermediate term rally. When that goes underway, the stock market would certainly be strong enough to buffer a rebound in oil until it becomes too painful to bear once again.

Skeptics continue to be disappointed today as the revision to Q1 GDP not only came in positive once again but came in 50% better than expected! So, the economy is not only NOT going into a recession, it is steadily growing once again! Yes, I know numbers can sometimes be doubtful as well but for now, numbers are certainly the most authoritative information anyone can get.

A nice but again modest follow up in the Dow today, rising along its regression channel. Short term momentum as measured by my short term technical indicators have turned up with the daily 30MA acting as immediate resistance and the 12500 level as immediate support. There are no indications that the Dow is going to make an explosive breakout anytime soon and we may just see the Dow range bound until crude oil price form a significant and definite break from its currrent intermediate uptrend. Even though crude oil retreated significantly these few days, its intermediate uptrend is still solidly intact. This continues to be largely uncertain and speculative times which justifies the use of a speculative but risk limited instrument such as stock options.

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Wednesday, May 28, 2008

Bulls Fight Back!

The Bulls fought back today as the Dow gained a modest 45.68 points in a follow up to yesterday's small turn around. Even though the gain today was modest, it was certainly an extremely important follow up as it broke the pattern of 22 May that I mentioned yesterday. The gain today was due mainly to a surprisingly big surge in ex-auto durable goods order, suggesting higher production and sales in the near future and reinforced the economic recovery story. Crude oil rebounded today as we all expected and is now lingering at the $130 mark once again.

I received a note yesterday saying that if I am telling everyone to conserve energy instead of simply getting long on crude oil, then I must really be desperate. That cannot be further from the truth. First of all, I am an economist and I hope for a healthy world economy more than just filling my own pockets. Higher crude oil is just going to cause the world economy to go into a slump and even though I could make a buck just getting long on it, I want a healthy world more than just a healthy pocket. My other picks are making all the money I need for me and I don't want to be one of those that cause crude oil to go any higher. I hope I made that quite clear. Higher crude oil hurts the world and that result is what I hate. As an options trader, I really don't care where the market or crude oil go to because I have the ability to make money in every market condition, so don't think I am desperate for the market to go up... quite on the contrary, my pocket will also be VERY happy if the market went straight down. There is a difference between money making and social responsibility and both must co-exist.

Tomorrow's GDP number is going to be the focus of the day (see economic calendar). Skeptics are dying to see at least one quarter of negative GDP growth in order to confirm their recession talk while the bulls are expecting yet another positive quarter to disappoint the bears. Who will win? Nobody will know before the number is released but from the way the recent data have been coming in, the outcome could be more optimistic than pessimistic.

So, what's the way ahead for the market? The Dow made quite an impressive turn around right at the bottom of its regression channel these 2 days on rising volume. This is certainly sign of strength and reinforced the 12500 support level. Are we out of the critical period yet? Not at all. We need one strong up day to reinforce the turn around, otherwise, the Dow could just as easily slip back down and break the support level. So, it is still not time yet to be overly confident.

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Tuesday, May 27, 2008

Stocks Gain As Home Sales Rise & Oil Pullback...

The Dow gained a modest 68.72 points today as new home sales increased by 3.3% in April and crude oil price dipped below the $130 mark.

The new home sales data was really encouraging as it reinforced the fact that the housing market is recovering. A recovering housing market is always precursor to a recovering economy, and if oil is not in the state it is in now, the market would have staged a strong rally.

Oil was certainly the main driver today as it took a significant dip below the $130 mark. However, we have seen similar pullbacks over the past 2 months with each time ending up higher, so no investors are convinced... just yet. This is why the response in the stock market is relatively muted. with another sabotage on oil pipelines today and OPEC not considering supply boost until September, the fundamentals remain intact for higher crude oil prices. The only question now is; Will the drop in supply keep up with the drop in demand due to higher prices? When demand drops way faster than supply, we can be certain of lower crude oil prices. Limited oil supply has been guaranteed by the illegal oil cartel and we all have to live with that, what we can all do to help is to reduce oil consumption by switching to public transport and turning off electricity when it is not needed. When we all act together, no illegal organizations can reap us of our hard earned money and our beloved lifestyle. Together, we can make a difference. Together, we can bring oil prices down! Here's a few simple things you can do today to help yourself and the world:

1. Keep your car in the garage for at least 1 day a week.
2. Switch to public transport when commuting during peak hours.
3. Car pool if you and your colleagues stay near to each other.
4. Switch off your living room light when watching TV at night.
5. Turning off the air conditioner when the room has been cooled down.
6. If you are considering buying a car, consider buying a smaller capacity car and not one of those V8 or V10 environment destroyers.
7. Turn off the TV when not watching. If you need some sound in the environment, use your ipod.



Tomorrow's oil inventory number is certainly going to be the focus (see economic calendar) and yes, without the Saudi's oil shipment, it is not likely to beat estimates.

The Dow pulled up slightly in the same fashion as on 22 May. It is not yet suggestive that the short term down trend has been broken unless it follows up with a strong up day tomorrow. The 12500 support level is critical. If the Dow failed to follow up tomorrow and breaks down below the 12500 level, the Dow could start an intermediate downtrend. How do you profit with limited risk if the market falls? Using Put Options of course!

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Sunday, May 25, 2008

Bears Taking Over?

This has certainly been a pretty stressful long weekend for all investors. High gas prices at the pump stressed holiday goers and Warren Buffett's surprisingly pessimistic comments stressed those still following business news. I certainly am still wondering where he got his data from. The Dow was battered down 3.91% just last week alone, totally breaking the intermediate up trend that was in place since March. Is this the "Sell in May and go away" syndrome of the market? It certainly was last year. At this point of time, all my technical indicators have turned decidedly negative with immediate support level at about 12200, failing which, a visit to the Jan lows seemed inevitable. This is also going to be a heavy weight week as well with the GDP number coming in on Thursday (see economic calendar).

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Thursday, May 22, 2008

Optimism Waning...

Crude oil dropped a massive $4 today but the optimism in the stock market has already been broken as massive profit taking prevented the Dow from making a significant move up. The Dow closed up a mere 24.43 points or 0.19%... a totally sideways day. This is despite the Jobless Claims numbers continuing to turn in better than expected, reinforcing the fact that the job market is recovering. What does the market action today tell me? That optimism is quickly draining from the market as investors fear a rebound in oil prices, taking it higher like it did over the past many pullbacks. So, the Dow is still not out of the danger zone yet as my conclusions for yesterday still stands.

Wednesday, May 21, 2008

STRIKE 3 To The Bulls!

Yes, I hate to make this call but it seems like the bulls have taken a defeat this time round as oil continues its menacing march past the $134 mark, compounded by a pessimistic outlook by the Fed. On top of that, the Fed is not about to go easy on the economy in view of rising inflation caused by high oil prices. These factors eroded the optimism in the market faster than an avalanche as the Dow tumbled to close down 227.49 points right after the Fed speech for a total 2 days loss of 426.97 points or 3.28%. At this juncture, I can conclude that as long as oil stays high, the market stays under pressure. On the technical front, the Dow's 30MA and the 12750 level has failed to hold up as a support levels and is now right at the bottom of its regression channel. As I mentioned yesterday, this is the failure that will make me re-assess the market and my conclusion is that if the 12500 level fails to hold as support, we could see the market go sideways for a while and if oil continues to march towards the $150 critical level, the market is going to go down. Certainly a good time to start keeping close stops for your longs and start building on your shorts.

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Tuesday, May 20, 2008

Strike 2 To The Bulls!

The Dow retreated nearly 200 points today as oil tops $129 per barrel. Does this spell the end for the bulls? Not really (otherwise I would have just said "Strike 3 to the bulls" right?). The move in oil today is a traditional pre-summer surge as oil traders expect a surge in demand for the coming summer driving season. This happens every single year but I think that oil traders could be in for a nasty surprise as high oil prices discouraged driving this summer, resulting in an unexpectedly large oil inventory. That would really start an avalanche. So, even though the summer is a traditionally high demand season for oil that justifies higher prices, this year might just be different with oil already this high. (And if you are still driving that V8 engine vehicle, hey, time to change down to something more realistic, ok?)

Has the bulls been defeated? Not just yet. The Dow retreated almost 200 points back down to its daily 30MA support level and off its short term overbought condition once again. I would say that the bulls and the bears are deadlocked with plenty of ammunition on each side. In fact, they have been this way this whole May. Again, tomorrow is going to be critical. If the Dow falls again tomorrow, closing below its 30MA significantly, we could see a quick disintegration of confidence as the old adage of selling in May and go away comes into the minds of most investors. This is certainly not a good time to be confidently long and that you should start to consider hedging some of your positions.

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Monday, May 19, 2008

Round 1 To The Bulls...

The Dow attempted to break the 13000 resistance zone today on great leading indicators just to meet strong resistance from the bears as skeptics continue to take profit. The Dow was brought down from an intraday high of 13136.69 to close 13028.16.

Leading indicators or what is formally known as the Index of Leading Economic indicators, is an index designed to predict the direction of the economy by compositing a select group of 10 economic statistics (3 financial and 7 non-financial) that historically move ahead of the rest of the economy and have a historical track record of being about 3 to 9 months ahead of the economy. The leading indicators index released today was up 0.1%, inline with expectations. What is most important is that it is up 2 months in a row now, which is definite indication of a slow economy growth ahead and not an economic contraction. That's great news! That was why the market rallied in the morning today right after the index was released at 10am (see economic calendar) So, how about tomorrow's PPI numbers? Again, investors are likely to start buying into any bit of optimistic reading and likely tone down the effects of a pessimistic reading. Indeed, there are tons of reasons to ignore pessimistic PPI readings since it is almost uncorrelated to the CPI.

We also saw clearly the optimism in the market as investors buy into every bit of good news despite oil still edging slightly higher. This again reinforced the fact that as long as oil begin a decline, the stock market would be ready for a full force rally. Can you still profit from higher oil? You can by putting just a small amount of money on the stock options of USO. Why stock options? Because oil is already so high that it is hard to see it going higher. Stock options offers you those additional profits at only the risk of the small amount of money you commit to it.

The Dow certainly made a run for it today and if it had closed at or near its high of 13136, it would have represented a significant resistance level breakout and that we should be buying into it. However, the Dow actually retreated back down into the 13000 zone by the end of the day, erasing the breakout. So, the Dow is back to its critical juncture again... breakout or breakdown... it needs to choose within these few days and the longer it takes to make that move, the stronger that move will be.

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Sunday, May 18, 2008

Oil Continues To Be The Focus Next Week...

Yes, there is but one main focus next week... crude oil prices. Crude oil price is the final straw that will release the full power of the rally but it stubbornly remains strong around the $125 level. Over the past 5 days, we saw significant selling pressure for oil but has not seen prices come down significantly at all. If oil should break the $130 level, the pressure on the market could be so great as to make it improbable for the Dow to make a definite break above the 13000 level. The Dow has mustered enough energy to go all the way up to the 13000 level once again last week but disappointed us by not making a breakout. A look at the Dow daily chart showed that the 13000 resistance level is reinforced by the 200MA which is forming an obvious ceiling. It is certainly going to be an uncertain week ahead that will be based tightly on how the price of oil moves. The fundamentals for oil is strong but that fundamental is fast eroding due to the immutable law of supply and demand. And yes, the demand for oil is now far less inelastic than a lot of economists think. This is the time to be nimble.

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Thursday, May 15, 2008

At The Door Of A BreakOut Again...

12992.66 is the level the Dow closed at today, right at the doorstep of the 13000 resistance level once again! The stimulus behind the move is clear... the retreat in oil price below $125! One interesting phenomena to take note of today is that the jobless claims number and the Empire state index actually turned in slightly worse that expected but investors don't seem to care at all! Why is this so? It is clearly because investors are already in the "recovery mental model"! With this mental model in place, investors would take negative numbers lightly and put more weight on positive numbers. Yes, this is the exact mentality that results in bubbles when reality fails to catch up with expectations. For now, this is definitely working in the advantage of the stock market. Clearly, the only thing investors are watching now are energy prices... the final straw that I have been talking about for months. The short term fundamental for crude oil is definitely corroding with falling demand and a coming surge in supply, and stocks would certainly rally onwards with a retreat in oil prices.

Tomorrow's the May options expiration and that could produce quite a bit of volatility and we will be watching for a breakout of the Dow above 13000 significantly on strong volume (read my article on the mental principle of technical analysis). If the Dow shows weakness and retreats tomorrow, a reassessment would need to be conducted as failing at the same resistance level twice usually lead to something nasty. For now, none of my technical indicators is showing any significant weakness.


Wednesday, May 14, 2008

Strike 2 To Oil!!!

A sharp decline in auto sales released by the retail sales numbers yesterday was strike 1 to oil as it definitely suggests a cut back in energy usage by the US consumers. The CPI numbers today, which was better than expected, also suggested that energy consumption has declined significantly as energy inflation remains flat. How is that possible? Supply and Demand! What causes prices to remain stagnant when supply is short? A DROP IN DEMAND! All these data proved that energy conservation is now the theme of the day for US consumers and that a dramatic move down the demand curve should certainly result in lower prices if supply doesn't drop as much as demand does. In fact, oil supply is going to get a huge boost with another 16 million barrel of oil coming from the Saudi in June! That is going to be strike 3 to oil prices. So, what does an increase in supply but a decrease in demand result in according to econs101? It is just a matter of time crude oil come back down as reality sets in. When that happens, investors can be assured of a sustainable rally in the stock market as the economy recovers. All eyes would be on the Empire State Index and Jobless Claim numbers tomorrow for more confirmation of economic recovery (see economic calendar). I cannot predict the future but with the direction these numbers have been going recently, I think chances are more optimistic than pessimistic.

Even though the market sold off slightly in the afternoon, the Dow still managed to close 66.20 points higher today after slightly challenging the 13000 resistance zone intraday. With the Dow now in short term oversold condition due to the recent pullback onto its 30MA support, it is now in a far better position to challenge the 13000 level again. The last time it challenged the 13000 level, the Dow was already in short term overbought condition, which does not give it the kind of strength for breakouts. I remain optimistic as I ensure my portfolio is long delta.

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Tuesday, May 13, 2008

The Oil Battle Continues...

The market closed mixed today as oil rebounds despite a rising dollar. The only thing that stopped the market from closing decidedly lower today was a better than expected ex-auto retail sale. It is no surprise that auto sales is going to drop more than normal with gas at the pump this high due to higher crude oil prices. In fact, I construe this reduction in auto sales as a good thing! It signals a move down the demand curve that would certainly add pressure to crude oil prices. The full scale battle against crude oil has begun and has begun to show up in economic numbers. Clearly, crude oil cannot win this battle due to supply and demand relationship. I hope more investors see this point. On the technical front, the Dow has moved largely sideways and we would certainly like to see a clear resolution to upside soon before bearishness builds up again.

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Monday, May 12, 2008

Oil Pulls Back, Dow Gains...

The negative correlation between the price of a barrel of crude oil and the stock market played out today again as the Dow gained 130.43 points today, erasing the losses of yesterday. The question that needs to be asked here is whether or not this is the start of a significant correction in crude oil prices? I don't yet think so on both the fundamental and technical front. On the fundamental front, oil demand is expected to increase going into the summer months while crude oil production is going to remain stagnant as OPEC postpones their meeting to September. This alone is a strong short term support for oil prices. On the technical front, crude oil price is still rising along a strong rising trend line with no indications of breaking the pattern yet. Will oil price ever come down? CERTAINLY! In fact, when it does, it will collaspe with such surprise that will throw OPEC and oil traders completely off guard. This is because higher prices is just going to force consumers and nations away from oil and into alternate energy in every area they can. Such a shift in the demand curve would force prices down. Plus, the more human beings research into a certain area, the more progress human beings make in that area. Human has committed way too little time into alternate energy development due to the relatively low oil prices of the past decade. This surge in oil prices may really be the catalyst mankind needs to make a significant progress in the area of alternate energy and to come up with a lasting, green, renewable and widely available source of energy.

The Dow certainly made an EXTREMELY important rebound today!
As I mentioned yesterday, the daily 30MA of the Dow served as a strong support level which could help battle against failing at the weekly 30MA. The rebound right off the daily 30MA today confirmed yet again that the short term bullishness is still holding up and not only diminishes the possibility of failing at the weekly 30MA, ending the intermediate bull run, but also opens up the possibility of a challenge of the 13000 resistance zone once again for a significant break and continuation of the intermediate bull run. I remain optimistic and will load up on more call options tomorrow if the Dow holds up.

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Sunday, May 11, 2008

A Dangerous Week Ahead...

After an impressive 1 month run, the Dow finally failed right at its weekly 30MA resistance line, which corresponds to the 13000 resistance zone. In fact, if the Dow breaks down below the 12750 level significantly again this week, it could spell the end of an intermediate uptrend and the beginning of an intermediate downtrend. For now, short term indications still indicates more bullishness than bearishness and the daily 30MA still serves as a strong rising trend line. On the fundamental front, rising oil prices continue to be the concern as oil holds strongly above $125. This could affect the CPI numbers due this week (see economic calendar). Oil continues to be the only nemesis so far as Gold and other hot commodities continue their decline.

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Thursday, May 08, 2008

Stocks Gains Despite Rising Oil...

The Dow gained 52.43 points today despite oil hitting fresh highs once again. So far, the Dow has been behaving in the exact same fashion it did when it rebounded last month, so, if it follows up strongly tomorrow, we could look forward to a significant break of the 13000 resistance level. How about the rising oil price? That's the only thing nagging me right now. Excluding oil, the economy and the stock market is well poised for a recovery. In fact, the stock market has been rising for over a month now. However, crude oil price, being of negative correlation to stock prices, could be an indication of lower stock prices to come if it continue to rise. In fact, crude oil has been on an extremely strong uptrend since the beginning of 2007, in line with the credit crisis and weakening of the dollar. Yes, the weaker dollar was certainly a huge reason why crude oil is this high, the other reason being the fact that supply is reducing around the world but OPEC is not going to meet until September. The US dollar has strengthened significantly over the past month but it doesn't seem to have an impact on crude oil prices yet as continual reduction in oil inventory kept prices rising. The point to consider now is, how much is this rise in crude oil price supported by fundamentals? Reduction in oil inventory is certainly cause for oil to rise due to supply and demand but has prices gone beyond supply and demand model? I see that oil is certainly over extended and the very moment a weakness in oil fundamentals is detected, a self defeating process would certainly occur taking oil prices down in the same explosive fashion we saw back in 2006. Anyone still willing to speculate on higher oil prices at this high level should do so through call options on the USO with only an amount of money that you can afford to lose. USO is the ETF tracking oil futures and is as close to buying actual crude oil as it gets.

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Wednesday, May 07, 2008


Crude oil reached for the sky today as it made yet another historial high of above $120! Last year, when the white house economic committee panicked over possible $150 per barrel oil, analysts were skeptical. Right now, I hate to say this, $150 does look like a possible and realistic scenario. The surge in oil price squeezed all the optimism from the stock market today, taking the Dow mercilessly down over 200 points by the end of the day even though Q2 productivity turns up better than expected, which is a sign of a recovering economy. In fact, sadly again, there doesn't look like there is any reasons, fundamental nor technical, for oil prices to come down at all. Oil fundamentals does support higher oil prices with reducing supply and growing demand and oil technicals show a strong bull trend riding atop a strong rising trend line with no signs of weakness nor signs of being overbought! Oil has never been this high and demand for oil has never been this high either. This means that nobody knows what to expect as economists and quants rush to update their economic models in order to generate a reasonable prediction of the future.

Does this spell the start of a huge correction in stocks? I don't think so. I've already predicted that the Dow needs to drop to as low as 12750 in order to get off its overbought condition before it tries to break the 13000 resistance zone significantly, remember? In fact, the Dow staged a decline of over 200 points last month on 11 April before it mustered enough strength to break the 12750 resistance level significantly. This time round is no exception. So, this decline doesn't come as a surprise at all. I will be watching how well the 12750 support level hold up over the next couple of days very closely. To keep the game play unchanged, the Dow needs to stage a come back within 3 days, otherwise, a reassessment of the market behavior needs to be conducted. Let's see how it plays out.

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Tuesday, May 06, 2008

Yet Another Sideways Day...

Two days into the week and the Dow has done nothing more than moving sideways. These sideways days have brought the Dow slightly down from being overbought as the possibility of a significant breakout of the 13000 level builds up. Tomorrow's housing data is going to be the center of attention and a positive number might be the catalyst the market needs to continue this rally.

Monday, May 05, 2008

Crude Oil Fights Back!

Just when we thought oil is going to gradually settle down to more sensible levels, crude oil price came back in a big way, making an intraday new high of over $120! This put immediate pressure on the stock market as the Dow retreats slightly by 88.6 points or 0.68%, barely even 1%. This shows one simple fact and that is, investors are increasingly bullish on the market and is not about to allow one or two bad things to spoil the day significantly. Being the final straw that needs to drop before a full scale market rally can happen, oil have been hanging in there with geopolitical factors forcefully holding its price high. In fact, the fundamentals and technicals of crude oil price does support higher prices to come. However, one important factor that may contribute to lower oil prices in the forseeable future is the rebound of the US dollar since 23 April 2008. The US dollar has strengthened significantly and could be depended upon to continue strengthening with no more rate cuts to be expected in the near term. Other than oil, all my 15 reasons for the market recovery remains strong and investor sentiments grow more and more optimistic by the day.

As expected, the Dow begun to pullback today in order to muster more energy for a significant breakout of the 13000 resistance zone. In fact, a retreat back down to as low as 12650 could still be reasonable and does not shake the short term uptrend of the Dow. So far, the short to mid term bullish channel of the Dow has been established and supported so there are no reasons to doubt the validity of this rally.

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Sunday, May 04, 2008

The Week of Reckoning...

The Dow was up 3 weeks in a row last week! This is the first time the Dow is up 3 weeks in a row in 2008! So, anyone still thinking we are in a bear market? :) The Dow has accumulated a total gain of 5.87% since this rally begun 3 weeks ago and anyone who still cannot recognize this as what it is should retire from the capital markets.

All in all, the heavyweight week last week went well and almost all the numbers turned in supporting a market recovery. This is going to be a quiet week ahead, a good week for investors to properly digest the data from last week and to make a move this week. With a mere 200 points away from turning this year from negative into positive, I am more certain than ever than 2008 is going to be a great year. Do not be surprised if the Dow pullback a little from here due to the 13000 resistance zone. However, if the Dow followed up to upside again tomorrow, we can kiss the 13000 resistance goodbye. Never been a better time to be in the market!

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Thursday, May 01, 2008

Banging The 13000 Wall...

The bears could certainly hear the loud thumps on the other side of the 13000 wall as the bulls attempted to break it down today. The Dow gained 189.87 points today as optimism returned on optimistic jobless claims number and an ISM index reading that turned in at the same level as March despite falling short of estimates (48.6). The fact that the ISM index turned in at the same level as March kept the ISM recovery story intact, which is of course a bullish sign. The ADP report as well as the jobless claims report so far continue to point towards a recovering job market, which of course is adding to the speculation on positive numbers in tomorrow's Job Report (see economic calendar). Speculation surrounding an optimistic Job Report may also be what drove the market higher today. Adding to the optimism is the big follow-up in the decline in oil price today! Yes! Like I said yesterday, crude oil price needs to follow up to downside today in order to form a significant turnaround and it happened just as we hoped. Crude oil price is the final hurdle standing in the way of a full scale rally (how many times do I have to repeat this?) and if it continues its way lower, below the $100 mark, the market could truly go into a sustainable rally. Let's look forward to great Job numbers tomorrow and see if it sparks a rally next week.

The Dow made for the 13000 resistance level today and ended just slightly higher at 13010. 10 points above a resistance level does not signify a breakout. With the Dow still in overbought condition, I would not be surprised if the Dow retreats a little before making for the 13000 resistance level again for a significant breakout. That said, on a slightly longer time horizon, the 13000 level is not much of a level that will stop the bulls. In fact, we could see new highs this year despite widespread pessimism. The Dow is extremely used to trading in overbought conditions when a bull trend is in place. Is this it? Is this the bull trend that is going to keep the Dow overbought for a while more? As a technical trader, I would rather go with the trend then against it.

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