MPT Rating (05)

31. July 2008 by admin.

Thursday, July 31st, 2008; MPT Rating (05)

The GDP and Employment numbers took the life right out of bulls today…

The DJIA bearishly engulfed yesterday’s gains and sold off more than 205 points by the close… but sell volume was still rather well contained.  At this time I am looking for some short-term overbought conditions to be alleviated, followed by another attempt to rebound after or just before the next FED meeting slated for August 5^th.

The NASDAQ, closing down only 4 points for the day is looking very bad as of today’s chart…  we have another inverted hammer candlestick  formation today, and this one is showing substantial sell volume.  The slow stochastic indicator is well into overbought territory confirming the sell signal, and being this early in the start of the new uptrend line we are watching, I would not look for the trend to hold when tested.

Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (05); this reading is supposed to tell us there was buying in this market, but I am not convinced this is accurate, and even if it were it is very low… I think it wisest to trade small here and let the market clarify the situation.  Today’s activity could have been as much of a pullback after two strong days of rally, as well as a result of the bad economic news we saw today…  In this case it is best to return to the strict technical rules we follow to ensure we don’t get caught with our pants down.  In other words – if it is overbought, get out of it, and if it is not the perfect buy opportunity, you had better pass it up or place a tight stop loss limit on it.

As Always; Be Smart, Be Patient, & You Will Be Successful.

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