Online Stock Trading | Markets reverse trend after 3pm to end higher

Markets reverse trend after 3pm to end higher


Filed Under Market Commentary |

The Iran/Brittish sailor escapade continues to dominate headlines. Subsequently running oil to new highs and some fear to traders. Today, stocks just bounced around GDP number game in higher than expected giving stocks a boost this morning. Fear of backlash of the Iranian situation and renowned inflation fears started to wane on stocks. By 3pm stocks were settling then dip buyers stepped up and pushed prices higher by close. Volume from parliminary stand point looks to be flat or down on the NYSE and Nasdaq.

Nasdaq finished the day higher by .03%, hardly an impressive day. Over at the NYSE the leader of the day, DJIA ended higher by .39% and the S&P 500 up .37%. Volume ran flat to the low side on the NYSE and Nasdaq. Clearly showing that any buying interest is not being shared by the Instituitonal players.

GDP annualized growth rate came in 3bps higher than expected, at 2.5%. Bloomberg survey was looking for 2.2% annualied growth rate. However, what is troubling is the lack of Durable Goods outside of the Automotive world. What is also troubling is the fact that Ben Bernanke is telling us that the economy is fine and the Subprime mortgage lending was contained. It is interesting that is not mentioned is those who had good to excellent credit buying homes that are too expensive for their income level.

Subprime is not just subprime, it will affect prime as well. If you borrowed at an adjustable rate mortgage, had great credit but bought a house that was too large…now you can’t refinance because your house isn’t as valuable. Now you can not refinance, can’t afford the monthly payment…this has not been pointed out by ANYBODY! High end home prices will now suffer, foreclosures will not only affect the poor but now the middle class!

In the end, the housing market will take ahold of consumer spending. Those who are foreclosed on will have their credit scores sink and will not have access to affordable credit. Spending will be slashed, by a large margin!!! It takes 10 years to remove a foreclosure on your credit score, almost impossible to erase down the road.

Will this actually happen? Yes or no, tough to look into the future but one that is plausible. Price and volume action will start telling us when to get out of the market. Distribution has already played a major role so far this year. When will it show up? It did yesterday, but I will be on top of it when it does.

Cash, cash, and more cash is the place to be. Playing the ultrashort Proshares at the moment is still in its infancy stage. Small positions can be warranted at the moment. Please do not make your entire portfolio of them…For now keep your total around 5%. No need to burn your trading capital and no need to trade for the sake of trading.

Aloha and Happy Trading,
MS

marketspeculator@gmail.com

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Comments

4 Responses to “Markets reverse trend after 3pm to end higher”

  1. z-stock on March 29th, 2007 10:26 pm

    Market S
    I bought some qqqq puts today…just to have some insurance on any call activity, I get into…The market, is at lots of technical lines. So I’m 50/50 as to direction….
    I did read that going forward…tech bio and drugs, are the sectors to be in…and to avoid..health insurance, retail, and consumer goods…
    So, we’ll see…
    z-stock..

  2. Market Speculator on March 30th, 2007 7:57 am

    I think the market overall is 50/50…it seems that we will stay flat for awhile. Directionless market or as Jesse Livemore would say…path of least resistance is flat.

  3. BHCO on March 30th, 2007 9:55 am

    I agree. this “confirmed” rally is very weak

  4. Market Speculator on March 30th, 2007 3:24 pm

    The market followed-through in only 3 weeks…this is a head fake at its best. It did not give stocks enough time to reset bases.

    Look for this “directionless” market to continue…

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