Sunday, July 05, 2009

50 DMA is the key level

After my studies, i realised 50-dma seems to be the key level for the market this week. There are stocks trading right at 50-dma, some infact broken and many others still slightly above it. God knows what will happen if those above catches up. Is the market setting up for big crash? Earnings will kick off soon and after a dismal job loss report, the market seems to be anticipating to sell off any sign of weakening quaterly reports. If the earnings come in better, it may be the perfect ingredient for a rally.

Dow's 8250 maybe the confidence the market needs... both S&P and it has a Head and shoulder lookalike which echoed some of the stocks in the SG market as well. Nan dao... this time i hoot tio seh? keke I am also looking at HSI at 17,300 and how Nikkei trades 9.5k.

N.Korea fires missiles to celebrate independence day with defiance. Back in 2005/06, market always react negatively to N.Korea's actions for fear of a war up in the North. Recent test fires has been largely ignored. I think it is because back in those years, economies are still growing, market is bullish and looking for a reason to pull back. Fast forward to current market, we are talking about green shoots, however econs data were often mixed and job losses continue to worsen. We are still not sure of recovery and market heads uncertainties. Hence many look forward to improved earnings as a sign.... that is key. From the charts, i can see that the market has pulled back to wait for more clues.

As of now, i feel it can still go either way. We need those key levels to be compromised first.

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