You are currently browsing the The MPT Rating weblog archives for the day 22. May 2008.
22. May 2008 by admin.
Thursday,
The markets bounced today after the DJIA lost more than 400 points in two days. I think the markets could stage a rally here if Oil continues to sell off and sentiment improves for more risk ahead of a three day weekend, but I am not holding my breath for it; what it “could” do, and what it is “likely” to do, are two different things… I see a few oversold quality entry opportunities but I still see more stock which are at that half way point where they look tempting but (in my opinion) would look even better if this fall were not over.
The DJIA; gained 24 points for the day, and I am inclined to believe this is only a pause in the fall – market sell-offs tend to happen in two stages; first down leg, fake base, followed by the second down leg… I’m looking at the charts anticipating today to be the mark of the fake base.
The NASDAQ; gained 16 points for the day, also set up in a chart showing more down side potential highly likely. (You may click the market symbols to view the chart notes).
The S&P500; gaining 3 points is in perfect line with the overall market trend step-by-step, and if I am right we are going to see more selling before this bottoms… This does not mean that the markets must fall tomorrow, just that I would be skeptical of any advance from here, and would bet on further selling before we bottom. Time is never in our control, but the overall chart set up does indicate we will go lower and to that end we must only buy quality stocks at deep discount entry points, otherwise we get pressed lower when the market presses lower.
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 (04) which tells us to look for sideways activity… the problem with this particular reading is that we are on a support line and that support can break up or down in the markets so the (04) reading does not tell us anything we do not already know and in fact the absence of a bullish (05) or better reading more likely confirms this is not the end of our sell off in the overall markets.
As always I recommend investors and traders, be smart, patient, and ever successful.
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