Market summary for week ending Oct. 2nd

Well the stock market closed the week down for the Dow, Nasdaq and S&P 500. I have provided 2 charts. The first is from week ending Sept. 26th and the second is this weeks. You can see that while we have dropped this week, we by no means dropped enough to show any new predictions. We stayed between the 2 blue lines going closer to the one on the bottom of the range. You can see it is going to take yet another week or two before any clear determination can be made as to future direction. The Bears were celebrating after the higher Unemployment numbers came out today following lower ISM numbers earlier in this week. But their celebration was short lived as the market surprised most and was actually in the green for a significant portion of the day before closing down.

I had said back in August that the correction would come by the 3rd Friday of the month and this could be when we really know what is going to be the trend. And with each passing day the trend line from the highs of a 3 year chart of the Dow keeps butting up against the upper blue trend line. On the Uptrend line, the lower Blue line, if we break below that line we most likely will correct down to the 7,800-8,000 level. Now we just wait and see what the future will be. There isn't much news coming this week to bolster the Bulls case. And there is always the possibility of a negative surprise moving the markets lower. It doesn't have to be news from America but from anywhere in the world. Have a nice weekend.

10/21/08 Mid week update on Dow and Nasdaq.

Another wild day in the stock market, this time with a 237 drop on the Dow. The Dow keeps struggling with the 9,000 level, as it closed today at 9,003.

If you are thinking the markets will hold here, you are doing wishful thinking. Here's some useful info. The Volume on the Nasdaq today and yesterday was about 2 Billion shares. This is considerably lower than it has been in the past several weeks. Volume during the volatile selloff a week or two ago was 3-4 Billion shares traded. So when the stocks go up you shouldn't believe the move up and when the stocks go down, watch volume in the last few minutes. The Volume spiked up near the close today and the selloff was strong. As the volume increased the Index declined rapidly. To me this data shows there is more of an inclination to sell off rather than go up.

I am still predicting that the Dow will go down to the 7,200-7,400 level. That would be about an 18% further decline. So be mindful and remember cash is King. On a more positive note, when we reach the 7,200-7,400 level we will not go lower. The markets from that point will start to go up. The rise up will not be sharp but rather slow. Most will be happy to get back to this 9,000 level. That means selling some stocks are still wise at this point, as you will be able to buy them back still lower.