Bull still dominates the stock market last week. S&P 500 Index broke out above the upper trendline defining the falling wedge technical pattern. This should be a good signal to buy stock again. But i still aware of the volume on the buying. Buy signal can’t be confirm completely without confirmation of high volume on breakout. Let’s see the chart of S&P 500.
There are two perspective here. For the bull, we see double bottom and a broken falling wedge pattern. But if we see the longer timeframe, we can see that S&P 500 form a Head and Shoulder pattern. So the January high could be potential resistance for the index.
Now, let’s see from fundamental view. Based from Beige Book, the Fed still considers that the growth is slow. Nearly all economic indicators are showing improvement, but still not much.
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The movement of stock market last week was dominated by bullish movement. There are some optimism on the market because of good economic data and positive testimony by Bernanke. After corrected sharply to levels 1040, S&P 500 index bounced and continue to rebound toward 1091.60 level. The second support level I mentioned last week, apparently strong enough to prop up the index from falling further. For now, what deserves attention is the resistance level at 1105 as shown below:
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Ok … starting this week, I’ll start writing regularly on weekly analysis of the currency market, stock and other financial markets every week. As we can see together the last week was a horrible week for financial market. A pesimism dominates the market, while traders play some hit and run trading as mounting worries about the euro region’s debt problems. A strong rebound always followed by massive sell one day after that. Its happen both on stocks market arround the world and euro currency. This is usually not a good sign for economy…
Still same like what i mentioned last week in my post, S&P 500 index will test two major support (you can see on the chart below). But the price already on the first support line. Read more…
This May 2010 was recorded as the second worst May in the history of the stock market (The first is May 1940). The Dow was dropped almost 8% (7.9% exactly). Trader error and downgrade of Spain’s debt rating were the two most shocking thing happened this month. Escalating tensions on the Korean Peninsula triggered a flight from riskier assets.
One of big concern all investor see is the impact of a second slowdown in the global economy. Mark Matthews, equity strategist with Macquarie Capital Securities, tells that European banks will incur large losses on the loans they have extended to peripheral economies in Europe. Read more…
The threat of Europe crisis is coming and spreading… Investors responded by doing panic sell on stocks all arround the world. U.S. consumer confidence does not seem have positive impact to the market today. Whereas U.S. consumer confidence rose for the third straight month in May to the highest in more than two years as concerns about the labor market continued to ease. Index of consumer attitudes rose to 63.3 in May, the best level since March 2008, from a downwardly revised 57.7 in April.
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As I had on my earlier post, May is not the time for holding the position of buy / hold on the stock. Research based on the seasonality Analysis of Stock Trader’s Almanac proves that the strategy of buying stocks in October and sold it in May proved to generate much larger profits than we apply the buy and hold strategy (ala Warren Buffet). I myself have been holding PUT Option positions in the shares. One of mine is the stock AAPL (one of my favorite stocks). Here is a chart of AAPL
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The European Union spearheaded a $1 trillion plan Monday to contain Europe’s spreading debt crisis and keep it from tearing the euro currency apart and derailing the global economic recovery. Central banks around the world joined the coordinated effort to prop up the euro and repel speculative attacks against Europe’s weakest countries. The European Central Bank buying public and private debt to shore up liquidity and lower borrowing costs. Many investors, rattled for weeks by the prospect Greece would default on its mountain of debt. Read more…
Yesterday is truly the craziest day in the stock exchange history. It’s only happen about half-hours which began shortly after 2.p.m ET and the Dow plunge nearly 1000 points (S&P 500 plunge nearly 100 points) before up again to pare its losses. And all of these seems triggered by a trader error who entered a billion instead of a million for his trade. There still further investigation for this market volatility.
As we can seen together, yesterday is one of the biggest market drops in a day in history. The biggest one day percent drop in history was 22.6% in October 1987. Read more…
We frequently heard “Buy on October, Sell on May and go away” senteces, right? I think all of you who bought stock on October 2009 and hold until today, you’ll gain some significant income. Entering May, we’ll need to be aware. Based on Stock Trader’s Almanac 2010, “Disaster area May/June” between 1965 to 1984 with S&P down 15 times from 20 of May month. But between 1985 to 1997, May is one of the best month in a year with 13 up in rows (average 3.3% every year), after that it up 6 times, and down 5 times. $10.000 investment will grow to $464.305 if we always buy on November and sell on April in 59 years, compared to loss about $1.988 if we buy on May and sell it on October.
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Forex Trade
After down about 2 month without rest, it seem EUR/USD on consolidation right now. From the movement pattern, there is more probability to be bullish for a while, even i think not to much. Honestly, i don’t like this situation, because i have to play fast on this non trending pair. There are not too much important economic data will be realeased this week, except Unemployement Claims on Thursday & Retail Sales on Friday.
Stock Market Trade
Stock Market continue to rebound into it’s previous high on 1148. S&P 500 index gapped up and closed higher on Friday following a favorable jobless report released earlier on friday. Read more…
