Market Analysis Today

Dow Jones rallied the market up to 240 points on Thursday, April 09, 2009 since it got the news from Well Fargo (WFC) in which the company give forecasting that it will beat expectation on the earning announce on April 21, 2009 before the market open and it give good response to other financial institution such as Bank of America (BAC), Citigroup (C), and so on. Also, one other reason market was up was long weekend for Good Friday, as it is said from the Stock Trader Almanac 2009 that Dow Jones was up ten (10) times out of last 12 consecutive year. Windows dressing could be one other aspect that can rally the market up as well since early last week, Market tank quite significant for profit taking. What it means is Fund Managers dump underperforming stock and start to pick some good stocks with some criteria, such as: beat expectation, good news, or other fund manager just picked these stocks.

As we may know that April is the most bullish month in a year. Also, based on the history and what happened in the market is started from November to April is Bullish Time and started from May to October is Bearish Time. That's why month of May, some analysts call it "Sell in May and Go Away." Because people rally the market up by buying more stocks in April and when May comes to the corner, people get scary in which they more cautious in term of volume. Once they see a sign of volume starts to spike up, they sell the stocks right away. No every trader would like to hold the position in May unless value investing who they hold the stock forever like Warren Buffet, Sir John Templeton.

In my opinion whether or not market will be positive or negative for this week or the week after for month of April, it all depends on Earning Season, which we just started from company called Alcoa (AA) Dow Jones listed company and unluckily this company brought the market down since it miss the earning missed the expectation and gave lower foreword guidance of earning announcement. However, we will still hear some Dow Listed companies are coming up and this earning season will be over when company called Exxon Mobile (XOM) is announced.

April 2009 in Summary

There you go,

Dow Jones was closed minus 41.74 last night, as we can see from the chart that five (5) candle reversal in weekly chart. On the other hand, april is the most bullish month in a year. Therefore, in monthly chart, it opened lower and close will be lower low or when it opened lower and close will be higher. We see how it goes from the explanation below.

In my opinion, I could be wrong though :-) (Again, market is too dynamic and no one can predict where it is going) , it opens lower and when it closes higher in monthly chart but it all depends on earning season and some news that might effect to market movement. Furthermore, earning season is started today from announcing company called Alcoa (AA) in Dow Jones listed and earning season will be ended with ticker WMT (Wall Mart) . Actually, this earning season is the first quarter (Q1) and some analyst expect financial institutions can announce higher than expected with Bank of America initialized to government that BofA gained profit in the first two month of year 2009 and it might not need US government bailout.

Also, this is what happened, NASDAQ is up 12 of 14 time before GOOD FRIDAY and it is proven that eight straight since 2001 (based on Stock Trader Almanac 2009), this occurs on Wednesday, April 8th, 2009 and the next Thursday, market might be not too crowded because Passover day.

All my friends, good luck in year of 2009 and always trade safe :-)

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Continued: is it the time for Dow Jones to rally?

Continued: is it the time for Dow Jones to rally?

As it was discussed on mid march 2009, whether or not DOW is rallying up in short period of time.
Let's take a look at the chart. I display ten-year chart of Dow Jones, as we can see that the first day of april is bullish because it was closed positive 150 points and Dow is around 7,700 points right now, it's pretty impressive, rally up quite significant since mid march 2009 rally up day by day, since Bank of America (BAC) announced that in the first two month of year 2009, it made profit and it most likely, it didn't need bailout from US Government.

Let's go back to Dow Jones chart again, in year of 2002, Dow hit as low as 7,500 points due to bubble tech crash that made DOW tanked for few hundred points and right now, year of 2009, we are in 7,700 points, and we just starts month of april 2009, it is still long way to go. In my opinion, I could be wrong though :-), Noted: No one could be absolutely right in the market and market is too dynamic to predict. Dow might constipate for few time before making new high or new low and it highly depends on earning season or economic Calendar and later it makes response to analysts.

I hope we all have clear idea where market might go to and be prepare for the best and always expect for the best.

Good luck my friends and always safe trading

March is still bullishness of the month

President Obama rejected another bailout for GM and Chrysler and He gives two options for these companies either to quicken their stimulus plan for recovering or to fill out for the bankruptcy. This statement brings DOW JONES down to 7,522.02 (-3.27%) and cause the market was panic with high pressure selling.

What we can do as short term trader is we look at Sector Rotation that nearly get impacted by financial crisis. Take a look at Housing Construction with XHB, ETF for housing builder it moves quite significant during march trading. For the stock, we can take a look at: KBH, TOL, so on.

One of the reason is home price got beaten so badly and for those who have deep money pocket, they just buy and buy more houses for investing since the price is undervalue. Undervalue is sold in the market below the fair value or cost that build the houses.

Personally, I would enter the market once the XHB break above the resistance, resistance is becoming the support so I might wait for few days to enter and when to exit is when the candle attempts to hit the next resistance.

Good luck and save trading

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April is the most bullish month in a year

As we can see from the chart above, $INDU make a rally since March 09 which give a sign either economic start to recover or psychology effect meaning to say people start to buy right now and prepare for the april, the most bullish month in the year and sell when it comes to May, "Sell in May and Go Away." Obviously, some industries get good response from this rally, for example: health care industries, we can take a look at $HMO (index for health care) and some companies such as: WLP, UNH, WCG, and so on. It starts to rally.

Again, can we invest or trade on bearsih market? definitely yes, As quoted from Warren buffet "We feel fearful when people are greedy and we feel greedy when people are fearful." Therefore, it is time to buy with strong fundamental company but got beaten so badly during crisis in fact it shouldn't be down.

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Good sign from FOMC, Good response to NYSE

March 19, 2009 Briefing.com:

Yesterday, FOMC accounced that lending rate was unchanged from 0% to 0.25% and the good thing is FOMC (Federal Open Market Commitee) assign the Fed to buy treasury note for over $300 billion for next six months.

Once FOMC gave announcement last night around 02.00PM EST, the market showed in positive signs, which DOW was -52 points started to rally all the way to +90 points in closing time. It was fantastic and we can imagine how news can drive the market. Actually, on the opening, DOW was -100 points. Market is so dynamic and no body where it is going to.

Recently, DOW attempt to break the resistance around 7500 points and since last week it has already rallied up for few days in a row. It is almost certain that this month will be closed bullish.

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Is this the time for financial sector to pick up?

March 17, 2009 Briefing.com:

Financial sector shows the big move in this last few days. since Bank of America (BAC) said they don't need government help in term of bailout, Citigroup said that
they make profit for first two months of this year and the good thing is AIG paid debt to the bank over $100 billion.

As we take a look at the IYF (ETF for financial sector), it breaks above the resintance and attempt to make a new high for the next few days or few weeks. However, it is still below 5o days moving average (MA) even 200 days MA.

Therefore, in my opinion, we are still in bearish area and no strong evidence saying that financial sector has been recovered just because few news show the good signal but the cure of the problems still stay inside. It seems that it is bullish trend in the bearish time.

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AIG pays back over 100 billion to bank

March 16, 2009 Briefing.com:

Dow Jones is up around 80 points due to AIG pay back the debt to bank over 100 billion in which gives good sign to market. Also, regional market closed in positive sign.

OPEC leaves the production unchange for anticipating production will pick up again in short period of time.

Actually, this friday is third week of march 2009 in which expiration day for march option contract and the same day is Triple Witching day. On that day DOW is up 5 of last 7 and if we take a look at the DOW chart, it is already going up for 5 days in row and it is most likely that this month is close slightly bullish.

Next month, be prepared for the bullishness since april is most bullish month in the year however there is nothing can guranteee for that because no absolute certainty in the market. Market is so dynamic and whatever happenes this year, it might not happen next year but one thing, it can be same from time to time is human behavior that drive demand and supply in the market.

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Is it the time for Dow Jones to rally?

March 13, 2009 Briefing.com:

Dow jones rally up quite significant last night (+239.66) due to retail sales is better than expected, increasing 7% in february. Also, Standard and Poors downgraded General Electric (GE 9.57, +1.08) to AA+ from AAA, in which is expected by analysts since the performance of this stock is tank around 90% since 2008.

Financial sector is showing the good performance since Bank of America (BAC) affirmed that its business make profit in the first two months of this year and it believes that it will not need a government help for the bailout.

As we know that news drive the market whether market is up or down on that day and if we take a look at INDU chart is showing that it might be market constipate for few days before break above or break below.

Is this the time for trader to enter the market?

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China will significantly increase the investment in 2009

March 05, 2009 Briefing.com:

Dow Jones gain quite significant 2.23% yesterday because it's news that China will signifcantly increase the investment this year because it wants keep the employment rate.

General Electric (GE 6.69, -0.32) dropped almost 20% in this last 17 years and some analysts are not sure whether it can keep AAA rating since GE already cut devidend in last few days. On the other hand, Insiders instead buy more stock recently for showing that GE is still good company to invest.

As we take a look at GE chart, there is no sign that GE will retrace back in short period of time and market response is negative since it cut the dividend and earning announce is below expectation.

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Dow Jones make new low since 1997

NYSE Market: March 04, 2009: briefing.com

market is oversold and it looks like rollercoaster up and down without knowing the direction; it was closed down -0.55% According to analyst at Goldman Sachs, US economics will be minus 7.0% for the first quarter, even Ben Bernanke indicated that near-term outlook for the economy remains weak.
as we see from the chart, market was closed at 6,727 point, almost the same position when DOW was at 1997. Since on the most bullish on Oct 2007, DOW is down around 50%.

..Nasdaq 100 +0.4%. ..S&P Midcap 400 -0.7%. ..Russell 2000 -1.9%. ..NYSE Adv/Dec 1003/2109. ..NASDAQ Adv/Dec 942/1730. To learn more how to make consistently profit on bearish market

3rd bailout for Citigroup

NYSE Market: February 27, 2009: briefing.com

The US government take the major stake on Citigroup (C 1.50, -0.96) in which it announced it is offered up to $27.5 billion on common share converted to existing preferred equity.

General Electric (GE 8.51, -0.59) cut the dividend in which it will give save for the company up to $ 9 billions per year. From $0.31 per share to $0.10 per share.

DOW was close on 7,062 which is below the 2002, a lot of people asking where DOW might go down before it bounces back, some analysts say it might be sideway when touch to 7000 but nobody knows where the market going. As we know, we have no indication telling us that we will get out of this recession soon. we know that US government does whatever it takes to bring every thing back to normal. Unfortunately, the market respond is still negative.

For trader, it doesn't really matter which direction market might go to, in fact we can be in market everyday as long as we know which strategy we apply on this particular situation.

To learn more how to make consistently profit on bearish market

NYSE Daily Market Analysis

NYSE Market: February 26, 2009: briefing.com

The major indices began the session with solid gains, helped by ongoing efforts to bolster the financial system, but choppy trading and more negative headlines eventually took their toll on stocks, sending them into the red.

Health care stocks lagged for the entire session. The sector closed with a 5.1% loss. Particular weakness was seen in managed care companies, which dropped amid concern that health care reform will reduce Medicare spending.

..Nasdaq 100 -2.9%. ..S&P Midcap 400 -1.8%. ..Russell 2000 -2.1%. ..NYSE Adv/Dec 1412/1674. ..NASDAQ Adv/Dec 956/1675. Strong: healthcare facilities; divsfd banks; life and health insurance; regional banks; construction and engineering; divsfd financial services; independ. power producers; oil and gas drilling; divsfd metals and mining; semiconductor equip Weak: managed healthcare; industrial REITs; food retail; broadcasting; divsfd support svcs; divsfd REITs; office REITs; biotech; residential REITs; trucking

NYSE Market: February 23, 2009: briefing.com

Monday's session began on a promising note as stocks opened with solid gains following word the government may help Citigroup increase its tangible equity, while several government agencies pledged their support for the banking system as Treasury prepares to begin a series of stress tests for banks. The upward move was short-lived, though, as participants refocused on the lack of concrete solutions for the broader banking system.

There were neither market moving earnings announcements nor economic data this session. Tomorrow is also light on earnings and economic data, but Fed Chairman Bernanke will provide his semiannual monetary policy report to the Senate Banking Committee. He follows with a semiannual monetary policy report to the House Financial Services Committee Wednesday.

..Nasdaq 100 -3.7%. ..S&P Midcap 400 -4.0%. ..Russell 2000 -4.0%. ..NYSE Adv/Dec 417/2694. ..NASDAQ Adv/Dec 547/2158.

Strong: auto mfg.; divsfd banks; homebuilding; regional banks

Weak: tires and rubber; steel; managed healthcare; retail REITs; divsfd REITs; coal and consumable fuels; industrial REITs; residential REITs; divsfd metals and mining; office REITs

NYSE Market: February 19, 2009: briefing.com
stock market was down around 3 % as fear as the banking system was coming down even more.

Bank of America (BAC 3.79, -0.14) and Citigroup (C 1.95, -0.56) is the biggest pressure selling among financial industries, may taken over by the government and one of the senator is saying that Nationalization of bank might happen.

Financial sector is still the biggest concern in the market and it will be happening for the coming weeks.

.Nasdaq 100 +0.4%. ..S&P Midcap 400 -0.8%. ..Russell 2000 -1.4%. ..NYSE Adv/Dec 766/2341. ..NASDAQ Adv/Dec 788/1924.

Sector Watch:
Strong: divsfd REITs; residential REITs; specialized REITs; gold; office REITs; retail REITs; education services; casinos and gaming; semiconductor equip; industrial REITs

Weak: independ. power producers; divsfd banks; oil and gas refining; healthcare facilities; divsfd financial services; office electronics; auto mfg.; multi-line insurance; industrial conglomerates; oil and gas storage and transport