I’m not buying it.

Posted by Conrad
October 14, 2008

Mon 13 Oct 08 – After Market Report 

 

Quote:

Originally Posted by Conrad View Post

A technical bounce is due and with some feel-good news in the market now. With governments guaranteeing inter-bank loans, this should pump some confidence back into the market but it remains to be seen if the feel-good will last. Beware of Dead Cats!

Resistance levels @ 9,210 and 9,450
Direction for Monday 13 October September 2008; ∆ Up

Sorry, but I can’t take that “rally” seriously. For the most part, up till the last hour of trading, volumes really sucked. Then in the last hour, a lucky break above 9,050 and we’re rallying another 330 points.

All I can say is that those who bought into the market in those 330 points, “Good Luck!”. All we need is another down day and those positions will be losers. Market internals indicated that the buying spree in that last hour was a technical one, triggered by system buyers. Floor traders refused to commit anything without the Bond Market’s leadership.

Now that we’ve got that run, it’s going to be interesting to see how much legs it has. I won’t be stubborn and say that it will tank again because the 1987 tanker saw the DOW regain 22% the day after the big drop and never revisited its lows there after. That started the best rally the DOW has ever seen – in 12 years, DOW went from 2,000 to 11,000 before the Bubble burst.

So I’m not going to draw conclusions now. I know I’ve said that the market will go sideways for the better part of the next 2 years – I still maintain that the market will be range-bound as the world factors in economic recession fears and the broader global slowdown. Liquidity will still be an issue even in spite of global governmental efforts to inject funds into the money markets … we still need the retailers to come back into the markets with their cash – and therein lies the problem; a systemic confidence retreat.

Quote:

Originally Posted by Conrad View Post

The overhanging weight of recession is surely going to take some sort of toll to cut back any euphoria this week … I expect another roller-coaster week but I suspect volatility will come down from its incredible highs.

DOW Technicals for the week:
Resistance levels @ 9,210 and 9,450
Support levels @ 8,240 and 8,000 (Remember that my low low support is 7,080)

Direction for the week Monday 13 October to Friday 17 October, 2008; ∇ Consolidation

A reminder that this Friday is Oct Expiration Friday – one of the most unpredictable Ex Fri in recent history – when back in 1999 (AFC) DOW lost more than 260 points (-2.6%) in a single day; Open: 10,286 – Close 10,019 (Range 288 points).

So trade with much caution and always look for more than meets the eye.

Happy Hunting!

Market Matters

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