MPT Rating (04 Flat)

2. June 2008 by admin.

Monday, June 2nd, 2008; MPT Rating (04 Flat) 

The markets took a beating on less than bullish economic news this morning, but the near 200 point slid in the DJIA was met with late day buying of the overselling and that is the moral of the story – this pullback should be bought not shorted.

The DJIA; was the big loser for the day, shedding more than 134 points after bouncing off it’s low for the day.  The analysis of today’s candlestick formation on the 6 month daily chart for the (DJIA) clearly shows a weak hammer and those tend to sell off more before they stop and being that we are still above my anticipated sell off support live marked on the chart, I would not be surprised to see more selling – however I would recommend a quick review of the RSI indicator which has not peaked over 70 and is now at 40 (oversold) and becoming more oversold with each down day – This is a pullback to be bought not sold.

The NASDAQ; lost more than 31 points today but formed another hammer on the old resistance (now support) line…  I don’t look for much here, but I still see gaps in need of being filled on this chart so if given a mixed opportunity that looked like it could sell off lower – I would leave it until it did.  The slow stochastic indicator for the (NASDAQ) is at 63 and the RSI is at 55 after touching 70 – I’m in no hurry to buy here.

Today’s MPT (Market Power Trend) Rating, which tells us what to expect in the overall markets in the next session (short of any surprise bull or bear news) came in at (04) and this is a flat reading only telling us we are flirting with support and could go either way tomorrow…  The daily picture is murky here and thus we have to look at the bigger view; buy the pullback as it is not the start of a bearish trend, but the buy opportunity before the bullish assent higher.

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

Posted in Daily MPT Ratings | No Comments »