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.

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