THE MARKET REFUSED TO CO-OPERATE THIS WEEK. ROBIN CALLED FOR 8348 TO BE STOUT RESISTANCE AND IF REJECTED WOULD RE-TEST THE 7995-8110 LEVEL. IN FACT, THAT IS WHAT HAPPENED AS THE DOW FAILED TO BREAK 8348 AND RETRACED TO TEST 7909. WE HAD A BULLISH BIAS BUT A LITTLE PREMATURE ON THE CALL. THE MAGNITUDE OF THE BEARISH MOVE ON TUESDAY WAS MORE SEVERE THAN ANTICIPATED ALTHOUGH NOT TOTALLY A SURPRISE. INAUGURATION DAYS ARE TYPICALLY BEARISH. THE REST OF THE WEEK WAS SPENT ATTEMPTING TO RECOVER WHAT WAS LOST ON TUESDAY. THURSDAY AND FRIDAY WERE SIGNIFICANT IN THAT THE DOW REJECTED LOWER PRICE LEVELS ON DECENT VOLUME.
WHEN ATTEMPTING TO MOVE THROUGH A SOLID AREA OF RESISTANCE OR SUPPORT, IT IS LIKE TRYING TO SMASH THROUGH A PHYSICAL BARRIER. PRIOR TRADING ACTIVITY CREATED A BARRIER THAT WAS A LITTLE MORE FORMIDABLE RESISTANCE THAN INITIALLY ANTICIPATED. THE MARKET AT THE END OF THE WEEK TOLD ME THAT IT DOESN’T WANT TO GO LOWER AND IS PUSHING AGAINST RESISTANCE AND WANTS TO GO HIGHER. KEEP AN EYE ON THE PREVIOUSLY MENTIONED 8340-8350 LEVEL. WHEN RESISTANCE FINALLY SUCCUMBS TO THE BULLISH PRESSURE WITH VOLUME AND CLOSES ABOVE THAT LEVEL, THEN WE WILL RUN TO 9000.
LAST WEEKS’ INDU COMMENTARY:
“8348 will be important resistance in the INDU. If the index breaks that level on volume, look for it to run to 8900-9000. If it has difficulty breaking through, it could head back to retest the 7995-8110 level. My best bet is that we are going higher”.
The market was closed on Monday in honor or Dr. Martin Luther King’s memory.
Tuesday was true to form as the market put in a bearish performance on inauguration day. SST was hammered losing over 50% of its’ value. Citi also had a bad day as we ushered in the Obama administration. The DOW declined a whopping 332 points.
Wednesday, IBM stepped to the earnings plate and posted a solid report. Timothy Geithner was tamely interviewed by the Senate Finance Committee, which shed little light on the pending Obama Economic Stimulus Package. For that matter, little understanding was revealed on how a man so apparently qualified to be considered as the next Secretary of the Treasury has the inability to pay his own personal taxes. The DOW regained 279 points.
Thursday, MSFT missed its’ number and announced job cuts to boot. The DOW came well off its’ low for the day to close 105 points down.
Friday, GE contributed to a negative market in early trading even though they met their numbers. Concerns over projected credit losses in 2009 and a speculated downgrade on their credit rating was an anchor on the market. The DOW once again came well off its’ low to close down 45 points.
Week over week, the DOW was down 204, the SPX worse by 18 and the COMPQ negative by 52.
