MPT Rating (12 Bullish)

16. May 2008 by admin.

Friday, May 16th, 2008; MPT Rating (12 Bullish) 

The markets continued to stave off the sell-off, and trend even higher; though the close of the averages were off from Thursday, the low points show the markets to still be trending higher.  Overbought does not mean a market must to stop climbing; just means we have to keep an eye on the upcoming pullback.

The DJIA; closed down 5 points for the day, but higher the higher low from Thursday shows the trend is still in effect… we are seeing more and more overbought stocks out there and this tells us we are due for a pullback, but that pullback does not have to happen today, but we should all be buying stocks with a strong analysis of downside risk.  We are still recommending a few long opportunities but they are in oversold stocks with strong technical support systems; I would not recommend new investments into anything heavily overbought, I don’t care how hot you might think the sector is…  overbought situations always get corrected – it’s just a matter of time.

The NASDAQ; closed down 4 points for Friday, but again a quick review of the low point of today verses Thursday shows the trend is still moving higher…  This is a heavily short-term overbought chart and I would issue the same word of caution to all bulls out there – no the downside and stick to buys in oversold opportunities.  No one wants to be caught with their pants down when this thing turns.

The S&P500; closed up 1 point for the day forming that infamous hammer anchor I like to see after a break out of resistance… this is all good and bodes well for the future long plays, and I am still seeing many quality opportunities for longs, but I also see several overbought stocks with a date with a pullback in the future – It is very important that investors and traders stick to oversold entry points, or they will end up getting burned.

Today’s MPT (Market Power Trend) Rating, which tells us what to expect in the overall markets tomorrow (short of any surprise bull or bear news) came in at (12), and this is a very strong bull reading, telling us there is a good bit of “Smart Money” pouring into the market, but these guys are not short-term traders and they know their investment quality and I promise you they are being very selective as are we…  Not all stocks are created equal, nor are all successful investors and traders – stick to quality or lose your shirt.

As always I recommend investors and traders, be smart, patient, and ever successful.

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