Market comments for the week of Nov. 29th
Good day everyone. Hoping you are resting and catching your breath this longest of holiday weekends. You all work hard and once in a while you get a chance to rest so I hope you are taking it and resting as hard as you work.
Today I have 3 charts I am posting below. All 3 charts cover the past 3 months and all have 25 and 50 day Moving Average lines on them. You will notice that both the Dow and S&P500 are in a tight range between the 25 and 50 day Moving Average lines. The 3rd chart is of the Russell 2000 and it has a noticeably different chart pattern. It has remained above both the 25 and 50 day Moving Average recently. I believe that this Index is in an overbought condition and should have a larger drop when the breakout occurs to the downside. The Russell 2000 Candlestick pattern was a Hammer on Friday. So we shall see if this reverses the uptrend.
I have received many questions as to whether TZA will ever recover from the losses piled up on this Ultra Short ETF. That's a great question, but like all market moves, I can't tell you. All I can say is that I firmly believe we are eventually going to have a major market correction and retest the lows on the Dow of 6440, and when that happens many are going to be very scared. Whether the trigger is a Sovereign debt issue in the Euro zone or an economic trigger here as many believe QE2 from the Fed is killing us by death of 1000 cuts at a time.
In the meantime, live life the best you can to its fullest, as life is short. Spend quality time with family and tell them you love them. And as the Christmas holiday approaches, do something for the least of us, as you will feel good when you do. Whatever you have it's more than many in this world.
Today I have 3 charts I am posting below. All 3 charts cover the past 3 months and all have 25 and 50 day Moving Average lines on them. You will notice that both the Dow and S&P500 are in a tight range between the 25 and 50 day Moving Average lines. The 3rd chart is of the Russell 2000 and it has a noticeably different chart pattern. It has remained above both the 25 and 50 day Moving Average recently. I believe that this Index is in an overbought condition and should have a larger drop when the breakout occurs to the downside. The Russell 2000 Candlestick pattern was a Hammer on Friday. So we shall see if this reverses the uptrend.
I have received many questions as to whether TZA will ever recover from the losses piled up on this Ultra Short ETF. That's a great question, but like all market moves, I can't tell you. All I can say is that I firmly believe we are eventually going to have a major market correction and retest the lows on the Dow of 6440, and when that happens many are going to be very scared. Whether the trigger is a Sovereign debt issue in the Euro zone or an economic trigger here as many believe QE2 from the Fed is killing us by death of 1000 cuts at a time.
In the meantime, live life the best you can to its fullest, as life is short. Spend quality time with family and tell them you love them. And as the Christmas holiday approaches, do something for the least of us, as you will feel good when you do. Whatever you have it's more than many in this world.
Labels: charts of Dow, charts of SP500, Christmas, Dow, Moving Averages, QE2, Russell 2000, SP500, The Fed, TZA
posted by Charles Amico at 8:46 AM
2 Comments:
Thank you for the posting of charts and your thoughts on them.
I have to believe that before we see a serious change to the upside we first must need to have a massive wave come through to take us to a "point" where interest will then return to a positive for investing in the markets. That "point" being retesting the lows.
The present time seems to be missing many who were present not long ago. You have stated this before by the lack of volume now driving the market.
Those making money today in the market are those who have the capital which are able to manipulate them in their favor. This in time will cease and the markets will speed up the correction phase bringing the value of investing to a point where it is then of value.
You are most welcome, Anonymous. Glad you like them and my commentary. That's why I do this.
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