Stock Market – Pre Open Report – May 22nd 2008
INITIAL JOBLESS CLAIMS: 365K V 373KE; CONTINUING CLAIMS: 3.073M V 3.065ME
The all important continuing claims data continues to creep up. I anticipate a rapid rise in initial claims to take place over the next 6 weeks.
Other than the initial claims data this morning, there is little moving the market. Pre market futures are still weak and it would appear buyers are just not getting excited about the market here. After two days of 200+ declines it is normal to have a bounce, but just like a rubber ball, all bounces eventually wear down in height and come to an end. Just how much rubber is in this market will determine how high the bounce goes. But we have resistance overhead once again so I expect any bounce to be short lived.
On the question of Gold.. our member Opitz is correct, support is around $890. Personally what I do in situations like these is I will buy 1/2 of a position at current prices, and buy the second 1/2 of my position on a pullback (as long as it stays above the trend line). That way, in the event there is no pullback I at least established a position before it goes much higher. Remember, if the trend line in the gold chart is breached to the down side then you go defense and sell. At this time Gold is becoming a "safety" trade again, so I expect to see more upside this year.
Lisa will be back on soon, she has been on the road for a while. So for the moment it is just me here, but when she returns we will have more time to answer the many questions being asked to us. We love the questions.. keep them coming! The interaction between our members is wonderful to see!
I do have a trade idea for you this morning. This is a ’short’ trade idea. See the chart below.I would go short on this stock when price hits $23.25. And once the price does fail the trend line, then that trend line becomes your stop loss. It may trade in this pattern a little while longer before it fails the trend line. If in the chance the stock trades back up to resistance (top line) then I will enter 1/2 of the short trade at resistance, and then add the second 1/2 of the short on the failure below the trend line. This trade will be a many week hold once entry is made. I see a profit potential of near 35% over a longer period of time.
(MKSI – Daily Chart)
I just want to let everyone know that if we close this week at these levels (DOW, S&P, Russell 2000, and NASDQ), the weekly MACD histogram on the major indexes will have started to fall. This will be a clear sell signal. In additionn, if oil does come down, what will u think happen to the S&P?
Sorry about the grammar
Still holding on to the 1/2 of my QID position that I took out yesterday morning (sold the other half at yesterdays close). Also still holding my 2 natural gas positions.
I am looking for more trades now, but can’t find much that is interesting. I am slightly more bearish than bullish (as long as S&P under 1410) so I am looking for short plays first and then longs only if I can’t find the short.
Dry bulk shippers appear a little toppy again…..maybe a short there??
I’m looking for some LEAPS puts. Any industries looking particularly vulnerable?