"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 6 hours Gold Selloff Continues As Dollar Climbs Higher
  • 7 hours Gold Investors In A Frenzy Over Sunken Russian Warship
  • 8 hours The New King Of Electric Cars
  • 9 hours BlackRock Goes Bitcoin
  • 10 hours U.S. Banks See Best Earnings Report In Years
  • 12 hours The Case For Gold Is Not About Price
  • 14 hours Stock Market Sentiment Turns Bullish
  • 1 day What Is Bitcoin Really Supposed To Be?
  • 1 day The Surprising Media Giant Taking On Netflix
  • 1 day Cybersecurity Stocks Are Red-Hot As Election Looms
  • 1 day Americans Grow Weary Of U.S. Trade Policy
  • 1 day What Putin Really Wants From Trump
  • 2 days Europe’s EV Sales Growth Is Slowing
  • 2 days The Looming "Hyper-War"
  • 2 days The Real Winners Of The Real Estate Business
  • 2 days 3 Reasons Small-Cap Stocks Are Booming
  • 2 days Chinese IPO Fervor Slows As Xiaomi Disappoints
  • 2 days How Corporate America Is Filling The Gaps In Public Education
  • 2 days Bezos’ Space Flight Gamble
  • 3 days Is This The Answer To High Gasoline Prices?
3 Reasons Small-Cap Stocks Are Booming

3 Reasons Small-Cap Stocks Are Booming

As major market indexes waiver,…

Netflix Shock Hits FAANG Stocks Hard

Netflix Shock Hits FAANG Stocks Hard

Netflix released its surprising second…

The Case For Gold Is Not About Price

The Case For Gold Is Not About Price

Gold has seen huge gains…

Angelo Campione

Angelo Campione

The Advantage Report is a timing service that allows you to maximize profit in both bullish and bearish market, we have a proprietary system that…

Contact Author

Weekly Update

1/25/2009 9:02:55 PM

Welcome to the Advantage Report, this report summarizes the general market as well as the Nasdaq 100 and issues BUY or SELL signals when the conditions present themselves.

General Commentary:

Both the SPX & NDX remains on a Preliminary SELL signal. We've now been long on the SPY since December 3 and the QQQQ since November 5.

Last week was a wild one full of emotional events and the market had a somewhat manic demeanor to it. In the end it was essentially a sideways move and it's still unclear whether it'll be the bulls or the bears that'll come out on top. The fact that the system has not gone into a full sell signal yet for either market, shows that the bears are not yet in control and indecision remains the name of the game

On the one hand the bigger picture remains positive and on the other hand the shorter term looks negative. It seems that the market participants are fearful of all the bank issues but then hopeful of what a new leader can bring to the world. Lets see what the week ahead brings.

As a side note, I was looking at some historic charts and the pattern we're in at the moment resembles the inverse of the late 2006 period. In that case the market was headed higher but the technicals were weakening. Eventually the technicals proved to be right, however had you have been short during that time it would have been painful. This seems to be our experience at the moment with staying with the long side.

On to the markets..

Bigger Picture

We've had 3 weeks of downward moves and have now tested the 800 level. Last week I spoke about a symmetrical triangle developing, that could still be the case but in any event, we're range bound for now between 800 and 950 and no dowbt frustrating a lot of players.

Smaller Picture

Last week produced some wild swings but in the end we traded in the next support band of 800 - 850. Looking overhead, resistance at 850 seems stronger than support at 800 and the week ahead may reveal which side breaks through.

We seem to be muddling through this period in a volatile broad sideways mode and at this point there's not a lot to say that this situation will change anytime soon. It seems to be a good time for the credit spread strategy.

For next week, support on the SPX is 800 and resistance is 850 - 900.

The VIX Picture

The VIX clearly shows the manic state that the market was in last week with huge swings on both sides. An interesting thing is that there was potential for the VIX to climb significantly higher in the face of scary events surrounding the banks, but it didn't which could be positive. Another glimmer of hope here is that the MACD seems to be weakening which may help the broader market.

Looking forward, the 45 level needs to break again in order for the market to progress higher again, there is some hope but we'll need to see some follow through this coming week.

The VIX measures the premiums investors are willing to pay for option contracts and is essentially a measure of fear i.e. the higher the VIX, the higher the fear in the market place.

NDX Chart - Shorter Picture

Unlike the S&P, the Nasdaq has a little more support underneath it and if the 1140 level breaks, 1100 offers some support also. However, like the S&P, the Nasdaq is also trading sideways, between 1140 and 1300 and for now the range bounding is likely to continue.

For next week, support on the NDX remains at 1140 and resistance at 1200 - 1300.

Quote of the Week:

The quote this week is from Tacitus, a senator and historian of the Roman Empire, "The desire for safety stands against every great and noble enterprise."

Feel free to email me at angelo@stockbarometer.com with any questions or comments.

If you are receiving these alerts on a free trial, you have access to all of our previous articles and recommendations by clicking here. If you do not recall your username and/or password, please email us at customersupport@stockbarometer.com. If you are interested in continuing to receive our service after your free trial, please click here.


Back to homepage

Leave a comment

Leave a comment