Friday, March 6, 2009


Nothing has really changed, so I'll keep this short. We are still in this downward channel, which can either be 1) part of a bottoming process or 2) another primary leg down. The lower Bollinger band and flagging action suggests that we still have more downside from this point, despite the fact that we are oversold. I wouldn't commit all capital to shorting, but rather wait for the major reversal day (whenever it comes) and commit to a full-scale long position on a major spike on massive volume.

As for the employment situation, the consensus is a -648K M/M change, with a range of -800K to -500K. The previous reading was -598K. The unemployment rate is projected to be 7.9%, with a range of 7.8% to 8.1%. The previous reading was 7.6%. I've stressed this before, but the monthly employment situation report is the most important economic report. Let's see what happens!

Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!


Bob said...

Is that full scale long position a short position or buying stocks?

John C. Lee said...

long = buying, but ONLY on the reversal day.

Cliffynator said...

I've been drawing lines back to 1932, and also from 1974. I see a bunch of support lines around 656, 600, and then nothing until 460!
Put it on a log scale, and the line from '32 meets with the current channel boundaries at 535 in April, to 547 in September. Otherwise, we could be looking at 450 by the end of the year.

I just heard an EXCELLENT interview with a professional technical analyst named Louise Yamada on Bloomberg's On the Economy. It's 21 minutes, but I had to listen over and over. Here's the link to the mp3:

Great info for lower/middle level tech. analysts like myself. She sees Dow 6000 or 4000 (S&P 600/400).