What are we seeing today ?? A ton of my stocks, almost 70%, are down and reports from these compamies aren't thatbad. Is this a correction or market selling in prep for Sept. downturn ?? Any ideas are welcome…profit takers ??

Hope your right, but it seems that good news from companies is not even taken into consideration as I look at reports. We'll see !!

All of the major U.S. stock indices except the Russell 2000 have made near picture perfect Fibonacci retracements of their ranges dating back to October 2007. Look at weekly candlestick charts. The Dow and S&P have made 38% retracements, while the NASDAQ has made a 50% retracement. That these markets should find resistance and retrace here is perfectly natural. The fact is, the upward movement of these markets would still be on course if they retraced 38% to 50% from recent highs……and I'm eagerly awaiting that happenstance. It may not drop back that far, but I am certainly hoping so.

Bemoaning the daily fluctuations of the stock markets is a waste of emotional energy. In fact, real traders look at these times as the coming of new investment opportunities or a second chance at opportunities thought lost. Keeping a cool head now and making dispassionate decisions when the time is right will reward patient, disciplined traders.

Will, I hope you've been following the call option prices listed in the option "newsletter" thread on a daily basis. If so, you should already understand that option prices do not move exactly like the underlying stock price, at least until we get near expiration and the option is ITM. Relative price movement depends upon a number of factors. If you think you're "doing something wrong" email me and I'll try to answer your questions.

Does anyone here have opinion on ISRG? It's one of those that everyone loved in 2007-2008 and now you don't hear much about it.

The market is working higher up after its big down day on Monday, however the advance-decline and new high figures are running behind the market strength. This is indicating that a narrower list of stocks are responsible for the strength and says that the advance is in the maturing stage. This doesn’t mean that the market can’t go higher, but it does imply that the advance is closer to a top than a bottom. The advance is at about the 2/3 mark between the bottom and a meaningful top. There is still room to go, but the stocks that are participating seem to be thinning into the more defensive and late stage names that commonly bring up the rear of an advance. This is why the opportunities are still in healthcare and industrials.

I had some success with RYURX (an inverse mutual fund). RSW is 2X inverse of S&P500 and moves very fast. At its peak in Feb 2009, it was selling for $179. Right now, it is $73. I hung on to it for too long and got burned. Be very careful with inverse ETFs.  Others include TBT, DOG, PSQ, EUM, SEF. As for timing, that is the $6M question. Optimism may have more insight on timing.

Post edited 11:20 am – August 21, 2009 by shredmonster

Hmmmmmmmmmmmm……………….is Mr. MARKET perhaps liking the fact that socialized health care is

tanking ?

I don't trust this market.  I am taking profits as it goes up.

smiling2bank said:

Speaking of socialized health care . . .

I was wondering about XBI.

Would one of the experienced chart readers on this forum please look at XBI for me and tell me what you think?

Thank you in advance.

It looks like XBI has been moving with the market the last four days, but didn't do much on Friday, it opened higher than the Thursday close, but fell $0.08 to close the day at $54.16, (it opened at $54.22).  Reading the charts, this is a doji, and we will have to see what happens on Monday, and perhaps Tuesday to find out if it's going to reverse course.   Additionally, the 10 day moving average has fallen down to meet the 20 day exponential moving average but hasn't crossed it.  If it does cross, chances are XBI will start coming down.  Monday and Tuesday will give you a better idea.   Below is a chart with moving averages and some chart tools.  the Williams %R, the money flow index and MACD are all neutral and don't give any indication of which way XBI is going to trade.    http://finance.yahoo.com/echar…..icator=sma(10)+ema(20,30)+wpr+mfi+macd;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

Getting back to "The Market Outlook"

I am liking the fact that socialized health care AND cap and trade is failing.  I think these two uncertainties are holding back businesses and the market.

However, I am selling on the way up.  I am having one of those "this can't be right feelings" like I did back in the internet bubble.  I see too many people out of work and unwilling to return to work because they would loose their unemployment check.  I see too many cars, boats and whatevers with for sales signs.  I see too many perfectly good roads being torn up and rebuilt.  I have never seen so much lumber stacked up at the big name local sawmill.  They have at least 10 times their usual inventory and the usual 24/7 operation has been reduced to one day shift for five days a week.  Something ain't right…

The Current Trends:

Investor Sentiment is at historically high levels but not peaking yet.

Advance-Decline Line is moving up in confirmation of the market’s strength and suggesting further upside.

The VIX is still falling, and not yet near historical peaking levels.

DJ Transports are lagging the industrials but very close to breaking out and confirming the bull market.

DJ Utilities are confirming the general market strength and projecting more upside.

US Dollar is testing the low at 77.50, and has risk to around 70 if broken.

Gold remains in a neutral range of 88-96 on the GLD with no indication of a breakout yet.

Oil is breaking through resistance at 72-73 with potential to rally to 90.

Natural Gas as a commodity is still weakening, but the stocks are rallying.

10-Year Note is neutral in a 33-39 range that could last for several months.