Back on January 23rd, I remarked that the Dow Jones showed the best technicals for a sustainable bottom. Now, over a month later, the index is still making a valiant effort to shrug off what ails it and start making higher highs. I am considering going long the Dow Jones in the morning. I am concerned about the 50 day average resistance, as well as the boundaries of the triangle, but this damn market is trading as if it wants to go higher. As noted above, I will be a bull when the Dow retakes the 50 day average, tests it, and holds it. Until that happens, I will continue nervously scaling into longs.
The Nasdaq is still firmly in the grasp of the triangle. I find it difficult to believe the Dow can continue up indefinitely while the Naz languishes, although it makes sense that the Naz will be weaker given its exposure to companies that are less able to weather a recessionary storm.
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The SPY was able to close just barely above the upper boundary of the triangle. As noted above, I still do not want to be long this index due to the financial component.
While there are still multiple areas for overhead resistance, the markets seem to have shrugged off “re-test fever” for the time being. In order to not miss a large portion of any move off a market bottom, traders have to have a point where they will again enter long, regardless of their sentiment and hunches. My jumping-in point is based around the 50 day average. As the markets look as though they want to challenge this average, I will forsake finding new shorts and focus on longs, although this may be ass-backward. The market downturns I have examined have shown me that the indexes typically fail their first test of the 50 day average, but I want to be prepared for any possibility.
Finally, INO has been kind enough to present to the winner of the Final Four a one year subscription. This is over a $500.00 value folks. Be sure to check out their site, even if you don’t give a crap, just because they are nice enough to present you tards with a killer free sub.
Woody – Any thoughts on MA? Bounced off support at 189 but closed below the 50DMA. A gapdown tomorrow could signal a short entry imo
For fellow chartchompers a couple good sites are
stockconsultant.com
askstockguru.com
stockta.com
I’m bearish on MA, although I’m with you in wanting to see some follow through tomorrow before getting short.
Any thoughts on how a VISA IPO might affect MA?
As for other chart chomping sites, you mean to tell me you need more than what I provide? Seriously, I hadn’t seen those sites before. I’ll check them out.
V’s IPO impact on MA is something I cannot decipher at this point. MA’s big competitors so far have been AXP and DFS. While V has a much greater footprint than MA in the consumer credit/debit card segment, the short-term future of MA clearly hangs on regulatory issues with the EU.
Though outdated by 4 days check this out – http://www.reuters.com/article/marketsNews/idUKN2147612920080221?rpc=44
A few noteworthy points in this article –
“The European Commission has already cracked down on MasterCard when it told the company late last year to cut its interchange fees within six months or face heavy fines.” – We know how tough those EU nuts can get. 6 months is June.
“In the same filing, MasterCard also said it faced some problems in the auction-rate securities market this month, which recently became the latest victim of the global credit crisis as liquidity dried up…..At the end of last week, it held $252 million in these types of securities” – auction-rate securities market and MA?? that’s interesting
Coming to the most important statement –
“MasterCard also said that ongoing litigation may hamper its ability to compete in the global payments industry. A ruling on a lawsuit which allows customers to do business with rivals could “adversely affect our business.” – Now this would definitely help V
I use those chart chomping sites for quick intraday daytrades. To keep it simple, I bought march 190 calls on MA when it bounced off 190 (approx at 192) on nice volume and sold them when MA printed 197 in the afternoon.
Wood,
The DJIA has loads of Financials; C, AIG, BAC, AMEX, JPM, GE [Finance] GM [Finance]
jog
Some good information Joker, thanks. I might consider re-shorting MA…I had profits in it a month or so ago, but not being able to trade during work made it hard to capture profit during the large swings. I think I covered out of frustration.
Duc, of course there is exposure in the DJIA, but from a weighted measure, am I incorrect in believing the S&P has a higher percentage of financials?
Wood,
Could be, they are Cap. weighted in S&P500 and Price weighted in DJIA…so you could well be correct.
Off the top of my head I don’t know the answer.
jog
Based on the PPI numbers, it doesn’t appear that going long anything today will be a good move.
More triangle action for now…
Thanks for the triangle followup. 🙂
Unfortunately, the catchphrase such that “THE MARKET CAN STAY INSANE MORE THAN WE CAN STAY SOLVENT” seems to apply here.
I may need to steal fly’s broken time machine. Processing………….
richard