Market View Update (02/04/2009) （組圖）

Market View Update (02/04/2009) 

 

   We have a positive close yesterday (02/03/09) after three down days in DOW. Does this reverse the down trend? Not yet. We still see tough battle ahead. 
 

	Yesterday	Today	Change	Change%	Week%	MTD%	YTD%
Dow	7936.75	8078.36	141.61	1.78	0.97	0.97	-7.95
SPX	825.43	838.51	13.08	1.58	1.53	1.53	-7.17
Naz	1494.43	1516.3	21.87	1.46	2.70	2.70	-3.85
SPY	82.58	83.74	1.16	1.40	1.10	1.10	-7.20
QQQQ	29.41	29.87	0.46	1.56	2.79	2.79	0.44
IWM	44.84	45.16	0.32	0.71	1.53	1.53	-8.29
SMH	17.41	17.56	0.15	0.86	3.78	3.78	-0.28
USO	28.4	28.87	0.47	1.65	-1.20	-1.20	-12.78
XLF	9.24	9.07	-0.17	-1.84	-1.84	-1.84	-27.56

 

SPY just moved away from dangerous zoon, but it is still in the moving range. The up wave of SPY stopped at next resistance which located at 84.3. The more important level is 86. Before SPY break above this level, it is still in a range bounce mode and can not go any further.  Watch 84.3 and 86 closely. These are two key levels for near term move.

Today we may see SPY pull back because of RSI and other TA indicators near overbought level again. Overall, SPY/SPX is weak than QQQQ/Naz.

 

 

QQQQ extended its winning string to second day. Yesterday’s move pushes QQQQ into positive YTD return. We saw that Q’s formed a H-H and H-L pattern. It broke through the top line of moving range. The next resistance is 30-30.3 gap and then recent high at 30.55

 

We saw the spread between QQQQ and SPY are widening. Is it good or bad? This spread can not keep for long. Either SPY catches up with Q’s or Q’s fall back to close to SPY. We don’t see any reason the QQQQ can move much higher from here. The volume is decreasing while Q’s move up. And most Tech companies have terrible earnings so far.

Odd favors Q’s back down. We need to be cautious especially at this level and before CSCO’s ER report.

 

CSCO ER, which is due today after market, could bring some negativity to Q’s. CSCO stock price is too high for its declined revenue and diminishing earnings. It could be a trigger point to drag Q’s to down side.

 

It is better to take profit on QQQQ and QLD as well as tech long position before end of today. I may initiate some put position if CSCO continuously rise before ER.

 

XLF had a bad day. It closed in red against broad market. It is bearish sign. BAC dropped more than 11% with no major news. And all major banks, including C, WFC, JPM, closed in red. Financials and Banks sectors remained as the worst sectors from YTD performance.

 

One of the reason caused yesterday decline is the “Bad bank” plan may push to next week. The money from government is double edges sword, it could help or hurt banks. Investors fretted over the possibility that further government aid could wipe out shareholders.

 

The key is the bad loan and debt level in bank. All major banks need Fed aid to survive. BAC and C are under capitalized and need more TARP money to recapitalize. But I don’t think Fed want to nationalize BAC or C. This is the first thing FED wants to avoid. But for near term, financials and banks are vulnerable to downside.

 

For the short side, FAZ, SKF are good vehicles to trade on the market weakness. Watch IYR, (Real estate index ETF) it is now in down trend. If it continue this trend and below 30.5, the decline could be accelerated, and SRS will have good chance of sizable gain.  

 

 

USO remains weak. Today’s EIA report will be a make or break factor for oil sector.

Near term avoid this sector.

 

Education & Training sector remains strong. This is the sector good to long on any pull back during market down turn.  COCO, which we recommend on Sunday’s online conference, clearly outperforms other big players. (See chart)  COCO is still good to buy on pull back.

 

GOLD is another strong sector. Long side watch list: RGLD, GOLD, GG, AEM, GDX

 

Happy Trading !!

- Waveplayer