Market commentary for 02/02/2009
Good day!
Earnings season continued and so did the bad news. Earnings estimates for 2009 continued to come down and so did the markets for the 4th week in a row. With the poor earnings the amount of layoffs continued to rise with CAT cutting 20K, HD cutting 7K, CC losing 35K jobs, EK, S and GM announcing more layoffs. Continuing claims are at an all time high and the GDP contracted at the biggest rate in 25 years. Home starts were at an all time low and the consumer confidence number hit another low. The FED met and since they can't pay you to borrow did nothing. January had the worse month in history. Well you all get the picture.
We rarely see two trend days in the row but we had one on Friday. Not much to say about the action. On the 60 min charts we can see the indices continued the selling pressure continued that started after Thursday's open. Also we can see the DIA was the weakest again. The difference was the higher volume and stronger pace. I think the daily charts do not give us the whole picture, but they are good for support area determination. The market bias we can get from the bigger time frames. Despite the daily trying to break up after the FED announcement the weekly charts gave us proof the bear flag is still valid and suggests that the markets are ready for continuation. Again the DIA chart is the weakest and closest to previous low, while the QQQQ chart is strongest and formed a weekly base for now. For any swing bias I think that we must pay attention to the weekly and monthly charts. For now they suggest weakness and bear flag continuation. The DIA is ready to reach its previous low and we can easily see a lower low, but it is too early for that scenario. For now weekly charts suggest selling continuation and 60 min charts suggest that after two trend days we can expect to see rest. So right now it is higher risk to take a swing setup and my focus will stay with intra day setups and faster trades, but my swing bias will stay bearish. Action after FED was fake; same as FED announcement before, and obviously for now the market don’t have the strength for a stronger recovery. Economic news is bad and the market uses “hope news” for some rest, but when the news came out the bear take control.
Good day!
Earnings season continued and so did the bad news. Earnings estimates for 2009 continued to come down and so did the markets for the 4th week in a row. With the poor earnings the amount of layoffs continued to rise with CAT cutting 20K, HD cutting 7K, CC losing 35K jobs, EK, S and GM announcing more layoffs. Continuing claims are at an all time high and the GDP contracted at the biggest rate in 25 years. Home starts were at an all time low and the consumer confidence number hit another low. The FED met and since they can't pay you to borrow did nothing. January had the worse month in history. Well you all get the picture.
We rarely see two trend days in the row but we had one on Friday. Not much to say about the action. On the 60 min charts we can see the indices continued the selling pressure continued that started after Thursday's open. Also we can see the DIA was the weakest again. The difference was the higher volume and stronger pace. I think the daily charts do not give us the whole picture, but they are good for support area determination. The market bias we can get from the bigger time frames. Despite the daily trying to break up after the FED announcement the weekly charts gave us proof the bear flag is still valid and suggests that the markets are ready for continuation. Again the DIA chart is the weakest and closest to previous low, while the QQQQ chart is strongest and formed a weekly base for now. For any swing bias I think that we must pay attention to the weekly and monthly charts. For now they suggest weakness and bear flag continuation. The DIA is ready to reach its previous low and we can easily see a lower low, but it is too early for that scenario. For now weekly charts suggest selling continuation and 60 min charts suggest that after two trend days we can expect to see rest. So right now it is higher risk to take a swing setup and my focus will stay with intra day setups and faster trades, but my swing bias will stay bearish. Action after FED was fake; same as FED announcement before, and obviously for now the market don’t have the strength for a stronger recovery. Economic news is bad and the market uses “hope news” for some rest, but when the news came out the bear take control.
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