Sunday, July 6, 2008
RedDirt's Weekly Update
Since this is a weekly update lets take a look at the WEEKLY SP500 CHART. The thing about this chart that really stands out is the lower lows in the price and the higher lows for the RSI. Wouldn't you consider this to be bullish. Now all we need is a catalyst to turn the market up and confirm the big bullish divergence in the weekly chart. The 2006 lows are a major support level and the 50% retracement level(1172) coincides with the neckline(1176) of the last great bear market. Can the market become even more oversold? The Monthly Chart has the Williams%R at -96. This tells me we are at the most oversold level this market has seen in the past 22 years. Damn, maybe it's time to start buying. And yet it may be time to hide the women and children, because the big bad bear may not be done devouring the bull's. What can we look for to see if this market is about to make a turn. How about GE's earnings report this Friday. Now if they can just beat the street as badly as they missed last quarter, this bell weather could take the lead and get the market's headed back up. I think I'll go see what Bill Dirlam has to say on his latest MooseCall. I'll be updating the GarpScan early this week looking for some bargain basement buys. Be sure to check back in to see what shows up. I'm also keeping a close watch on the BRICTRADE charts to let me know when the timing is just right to go long.Thanks for stopping by and good luck with all your trades.
Labels: decisionmoose, RedDirts BRIC Trade, sp500, stock scans, weekly update
Comments:
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Great insight this week, and I totally forgot about GE on Friday. That could be huge. I agree about the oversold condition, and I believe it to be related to UBS, and other European banks that have to sell equities in order to raise capital. All of the stocks I track are nudged up against their theoretical lows, sporting absurd P/E's. These are stocks whose earnings are increasing. I'm betting on some major upside, but have cash, and will buy the downside.
This is the type of market condition we all dream of. Just like I tell my wife of 27 years,"If we had just bought $10,000 worth of Coke when we got married we could be retired now." Good luck, make some good picks and stick with them.
If the banks are selling who would you guess is buying? Could it be the Insurance industry sweeping the crumbs off the floor. Maybe we should look at this thing a little closer. Funds flowing out of banks into insurance and into transportation. Wait just one minute. Doesn't this start to sound more like the "beginning" of a cycle rather than the END! MEGA-CYCLE!!! Why else would Buffet be buying railroads? Transports are a leading indicator,right? I prefer Burlington Northern and Kansas City Southern myself,How 'bout you?
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