You are currently browsing the The MPT Rating weblog archives for 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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21. May 2008 by admin.
Wednesday,
The market is pulling back from short-term overbought conditions after a major rally to break though resistance… do you really think the bull market is over? We don’t.
The DJIA; lost near another 227 points today and we have marked the major market charts where we would look for support to come into play at… The game here is not to watch the market but look for the stocks which have yet to get overbought – The market works on a cycle and what happens to one happens to all. Know which stocks are running out of steam and which are just starting out.
The NASDAQ; lost 43 points for the day and we anticipate we will see the filling of the lower gaps in this chart before the selling is really over… If you are in an overbought stock you should be taking profits and moving into the next list of strong buy opportunities which will provide support.
The S&P500; was off 22 points by the close, and shows an overbought slow stochastic indicator with more down side to come… I have marked all 3 major market charts where we anticipate support for these markets, or at least where the markets will shift to having more oversold opportunities than overbought.
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 (11) which is still bullish and shows “Smart Money” is still buying, but they are being selective as are we. I do see the overall market as having more stocks in need of selling off and that equals to being “top heavy” so the trend will be lower until these short-term overbought conditions are resolved. It is very important here that you be mindful of your positions – are they overbought and in need of correcting? If so, it’s best to exit and move into the oversold winners for the next bullish cycle.
As always I recommend investors and traders, be smart, patient, and ever successful.
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20. May 2008 by admin.
Tuesday,
As mentioned a few days ago you should have been selling over extended stocks: (DRYS) and (
The DJIA; lost near 200 points by the close, picking it self up off of its intraday lows, but the candlestick formation for the day shows this market can sell off lower before it tries to bounce… my main advice to traders and investors here is to keep a strong understanding of what the markets are doing here and exit your short-term overbought stocks, but be willing to shop around for quality oversold longs – they are out there.
The NASDAQ; gapped down at the open and closed the day off 23 points finding support on the multiple support lines we pointed out yesterday… The RSI indicator shows a break down of the up trend here and that does not bode well for longs in overbought stocks… I can’t express it enough – check your RSI indicators and your slow stochastic indicators; if you are overbought and showing a profit I recommend taking some profits here. The market is not done advancing mid-term but that does not mean you will not have short-term pullbacks that will put the hurt on those who do not enter at oversold quality entry points.
The S&P500; was off 13 points by the close, and shows an overbought slow stochastic indicator in need of a short-term pullback to release this pressure… There are still quality stocks out there, but investors must be diligent and disciplined to stay clear of those over extended troubled spots – they will sell off.
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 (06) which is still bullish and shows “Smart Money” is still buying, but they are being selective as are we.
As always I recommend investors and traders, be smart, patient, and ever successful.
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19. May 2008 by admin.
Monday,
The markets sold off by the close, but also saw new highs and maintained the ascending lows in 2 of the 3 averages, and with the resent brake outs we’ve seen it is not likely the end of the bull market return, but a hesitation to build support.
The DJIA; closed up 41 points forming the inverted hammer (sell signal) on the 6 month daily chart, but the break out pattern we’ve recently seen developed there mutes this sell signal… the slow stochastic indicator is at 57 (hardly overbought any longer), and with the RSI yet to reach the short-term overbought conditions over 70 on this chart I believe we have higher yet to go… this does not mean we will not see down days in the process.
The NASDAQ; weakest of all our market charts (most overbought) closed down 12 points for the day, but again a quick review of the low point of today verses Friday and you will see the ascending uptrend remains in tact even here… and with several strong supports built into the chart and the RSI indicator still under 70, I do believe we can still go higher in the markets, though I would anticipate down days in the mix as weak investors get shaken out of good stocks.
The S&P500; closed up 1 point for the day forming the same inverted hammer sell signal as the DJIA for the day, but again the break out conditions void out the sell signal, and with the RSI indicator still under 70, I see more upside to this chart and the ascending lows and new highs also confirm this.
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 (08), and this is a very strong bull reading, telling us there is a good bit of “Smart Money” pouring into the market… If you are thinking this market is overly bearish you would be mistaken… pullbacks are natural, and should not be mistaken for bearish market signals – we see the markets going higher, though we do not foolishly anticipate this to happen over night.
As always I recommend investors and traders, be smart, patient, and ever successful.
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16. May 2008 by admin.
Friday,
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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