The market found someone to say 'uncle'

Hi there,
welcome back to the Stockchartsrus Blog.


On a day where the US Federal Reserve Board cut its short term interest rate by 75 basis points the S&P 500 rallied more than 4 percent. As the chart above suggests, the lows of January have been tested and the 4 year business cycle moving average has held. While it will take a close back above $140 on the SPY's to register a weekly buy signal, the market has registered daily buys suggesting a seasonal bounce. The fallout from both a collapsing US housing market and the subsiquent mortgage backed securities debacle has claimed its first (and the market hopes) the last victim, The Bear Stearns Company. The stock topped out during the housing mania a couple years ago above $150/share. Over the weekend it was announced there would be a mercy takeover of the company by JP Morgan at $2/share! Isn't capitalism wonderful....

In short, no reason to get bullish yet but maybe the worst is behind us...
Until next blog,
Brian

The Market Woes Continue

Hi there,
welcome back to the Stockchartsrus Blog.



Today we will look once again at the S&P 500 depository receipts (SPY). The potential bottom we talked about last blog has yet to be confirmed. Additionally, a move below the low of $126 (from 01/22/08) will signal yet another sell signal and suggest prices may need to move toward the $120 area. The Cliche, 'Its always darkest before the dawn' seems appropriate. Keep in mind, the US market (as measured by this broad basket of stocks) is now down more than 12% YTD so traders will be looking for any type of rally to save their February. As well, the market is flirting with the 4 year average price at or near $126. In other words, the market isn't over-valued any more.

In a sentence: While there is no buy, the market is cleaning itself up.

Until next blog,
Brian Beamish FMA FCSI