Friday, June 19, 2009

Market Update: Friday June 19th (UPDATE)

Pre-market indicators are up today. European markets are also up at this time and Asian markets were also up in overnight trading. Today is Options Expiration for Equities for the month of June and this month Quadruple Witching. All indications from pre-market are that we should finish up today, but the volume did not convince me yesterday, as trading will be most dramatic in the last half hour, so anything can happen. Don't bet on a higher finish.

The chart above is from Chart of the Day looking at the Dow from 1925 to now, inflation adjusted, except that I have added a red line with an arrow which shows where there is resistance. That line crosses at about 7,500 on the Dow. However if you look at the lows from history, the Dow fears are that it could go as low as 4,000 according to chartists. That was the fear when we hit the low of 6,440 on the Dow. many worried if we didn't low we were going as low as 4,000. But we did hold and managed to rally 40% from there.

I don't want to be a broken record as to repeating where the market will go before the end of October, as you all know my views. If you don't just read some of my recent posts this month.

I wanted to add several points this morning. I told a friend a few days ago to sell Home Depot (HD) as I see it going lower, and buy instead Lowes (L). I suggest any holding Home Depot do likewise. I also have asked a number of businesses in my local community in Marin County how business is and they said awful. In a local Mall yesterday where there were several hundred people, they seemed to be there to relax and eat some lunch in a few local restaurants but I noticed only 3 people carrying any packages from shopping. I also noticed a number of stores with huge Sales trying to attract customers, but there were few buyers or shoppers in their stores. Marin County is one of the wealthiest counties in California and the nation. Retail Space is very available as I see many For Lease signs. It does not look good for the economy here so I can't imagine how it is good for other not so wealthy communities.

The Put to Call ratio closed at 0.95 yesterday, down from the previous 2 days. Volume was less for the Dow and the Nasdaq and not convincing of the move up. The Dow remains below its 200 day Moving average.

UPDATE: 9:45am

The Dow was up about 60 points earlier this morning. However the Dow is now negative at down 15 points. Volume is high and already at the Moving average and will significantly exceed today. The Nasdaq is also ahead in volume today but it is still positive for the day. The S&P 500 is barely positive right now, up 1 point.

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