Monday, February 1, 2010

Weekly Outlook 2/1

Last week was another very poor week of price action as I thought we could see. The markets continue to be rattled by political risk, dollar strength, and overall bad reaction's to positive earnings. We have had roughly a 6.5% decline in the SPX and I do believe we could see that 10% correction into Feb. which should take us somewhere in the neighborhood of the 200 day ema on the SPX which sits at about 1044. However, not before some kind of bounce takes place early this week which I think could retrace back to the 1090s or even 1100 to head fake some people.

The dollar was strong and I think will test the 80 mark later this week and that should provide some mental resistance if nothing else. The Euro reached the 1.39 target I had for the last several weeks and continued a bit lower under that friday. It, like the stock market is stretched to the downside a bit much and could snapback quickly from these levels.

Commodities got killed last week as copper and oil took it on the chin. Crude is now down over 10 bucks from the highs just a few weeks back and copper is down 16% from the highs. No doubt alot is on the back of the strong dollar but also the scare that China might be slowing down its buying of commodities. Whether that's true or not does not matter. The price action is what matters and right now its downright bearish.

Overall I would not get excited about rallies in this market until we can see the market prove itself above 1120 for example. Instead use rallies to sell your longs or even go short on your swing trades. I really think a test of the 200 day ema is where you want to anticipate a more broad based bounce.

Buy the dips>> RYL, GNW, DPZ, VLO, SII,

Sell the rips>> AAPL, TSM, GT, STP, LMT

2 comments:

炫風 said...

希望能有更多心得與我們分享~ ....................................................

almost said...

good forcast JJ. We got your 80 in the USD today.