Market review and outlook for week of April 6th, 2009
The market is down at the time I am writing this today. However, given the Unemployment rate rose to 8.5% for March the markets are taking the news remarkably in stride. The Dow yesterday went over 8,000 for a brief time and closed at 7,978 while the S&P closed at 834.
As I stated last week on March 28th, and I quote, "So what's ahead for the week of March 30th? I am overall still optimistic on the market. Many see this as a Bear Market rally and can't see the Dow and S&P 500 going much higher. While I agree that this is still a Bear Market rally, I do believe we can go as high as 9,000 on the Dow before we pull way back again." I also said this, "I am hopeful this coming week of staying above the 50 day Moving average, but as I have cautioned before, if you are trading, pay attention as this market can go in either direction very quickly. One indicator next week will be the Unemployment rate and we already know it won't be good. But it is a look backwards..." It seems this latter statement regarding the Unemployment was close to what has transpired today. I don't see any change from that view.
The Put to Call ratio went to a high for the week of 1.14 on Monday, but since has dropped to about 0.72 today. The VIX Index is also quiet now at about 40. It seems to me that shortly those who are Short on this market are going to wake up and see the markets rise and finally have to cover giving the market its next surge back up to stay well above 8,200 on the Dow and 850 on the S&P 500. The markets are not going to sprint to above 9,000 anytime soon. But we will steadily gain a few percentage points at a time over a week's duration. It will help return some confidence to markets and to the Consumer eventually.
I believe this uptrend will take us into the summer months and we will remain within the range of 8,000 to up to 9,300 until September and October when we all will know if the strategy to get the Banking system and economy back on it's feet. If we haven't by then, the markets will retreat and retest the lows at the 6,400 level. So if you think we are going to eventually make it, then it is time to start buying back into this market with fresh funds, as watching from the sidelines is going to feel like a huge missed opportunity.
As I stated last week on March 28th, and I quote, "So what's ahead for the week of March 30th? I am overall still optimistic on the market. Many see this as a Bear Market rally and can't see the Dow and S&P 500 going much higher. While I agree that this is still a Bear Market rally, I do believe we can go as high as 9,000 on the Dow before we pull way back again." I also said this, "I am hopeful this coming week of staying above the 50 day Moving average, but as I have cautioned before, if you are trading, pay attention as this market can go in either direction very quickly. One indicator next week will be the Unemployment rate and we already know it won't be good. But it is a look backwards..." It seems this latter statement regarding the Unemployment was close to what has transpired today. I don't see any change from that view.
The Put to Call ratio went to a high for the week of 1.14 on Monday, but since has dropped to about 0.72 today. The VIX Index is also quiet now at about 40. It seems to me that shortly those who are Short on this market are going to wake up and see the markets rise and finally have to cover giving the market its next surge back up to stay well above 8,200 on the Dow and 850 on the S&P 500. The markets are not going to sprint to above 9,000 anytime soon. But we will steadily gain a few percentage points at a time over a week's duration. It will help return some confidence to markets and to the Consumer eventually.
I believe this uptrend will take us into the summer months and we will remain within the range of 8,000 to up to 9,300 until September and October when we all will know if the strategy to get the Banking system and economy back on it's feet. If we haven't by then, the markets will retreat and retest the lows at the 6,400 level. So if you think we are going to eventually make it, then it is time to start buying back into this market with fresh funds, as watching from the sidelines is going to feel like a huge missed opportunity.
Labels: banking system, Dow, economy, ETF's, market outlook, missed opportunity, Put To Call ratio, retest lows, SP500, TNA, TZA
posted by Charles Amico at 9:32 AM
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