The opinions expressed in this blog are those of the author. All data is deemed reliable but is not guaranteed. This data cannot, in and of itself, be used to determine which securities to buy or sell, or when to buy or sell securities, or assist persons in making those decisions. Past returns have no predictive value and are no indication of future returns. All portfolios have a measure of risk and can decrease in value and create a loss. Reward and risk have been shown to correlate positively with each other.

Tuesday, December 18, 2007

equ!ty trad!ng partners - Market Update for December 18, 2007

The Dow closed up for the day, gaining 65.27 points, or 0.50%, and the Nasdaq Composite gained 0.84% with a 21.57 point gain.

It was a bit of a mixed day with the market spending most the morning dropping, but it turned and headed into positive territory during the afternoon. It seems that the declining has abated a bit. This doesn't give any great hope that we've hit a long-term bottom, but it looks like we might see a bit of a rally - at least tomorrow. The reason I say this is that when I look at individual stocks, there are a lot that seem to be oversold in the short-term.

Today the leading industry group was Mortgage Finance, and when that's the top group, it really is nothing to get excited about. That has been the top group on every false rally we've had since the market started dropping two months ago.

To follow up on yesterday's report, you can see from the chart above that our support area basically held today. Even though the market broke below our support line, it was able to rally back and close above it. We'll keep watching this area for support.

Hopefully we'll see an up day tomorrow, but there still isn't anything to get overly excited about. We'll see what happens.

Have a great evening, and a great day tomorrow.

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Monday, December 17, 2007

equ!ty trad!ng partners - market update for December 17, 2007

Another down day today, with the Dow dropping 172.65 points, or 1.29% to close at 13,167.20, and the Nasdaq Composite dropping 61.28 points, or 2.32% to close at 2574.46. The bigger concern here is the Nasdaq's drop, which we look at a bit closer on the charts below. The breadth of the market was negative as there were three stocks declining for every one advancing.

On the Interest Rate side, the 10-year Treasury yield closed at 4.193%, a small drop from Friday's close. If the stock market continues to be weak, we'll probably see that rate drop as money flows to the safety of treasuries.
Nasdaq Composite
As we stated above, the Nasdaq is of most concern at this point. The chart to the left shows its three closest support levels. These levels are where some buying should come in to stabilize it. As you can see today's close, and low for the day, was right on the first support level, at 2574. The fact that the Composite closed at the low is not a great sign. The next support level is denoted by the number 2 on the chart. This is at 2,531, which was the peak on February 22. If both of these support levels are taken out, the third support level shown is around 2427. These support levels are shown on the chart below as well.

This view shows where these trendlines originated, giving us some clues as to where to look for support.

So the stock market is still in a funk, and there really aren't any signs of it making any great change of direction just yet, but of course that can change in an instant. But until it does, we'll remain content to wait patiently for the opportunity to present itself.

Until tomorrow....