testing the font
I do not know what happened last night when I posted. All of a sudden, the fonts were smaller. It could be that the servers of wordpress had gotten very sleepy since it was past 11pm when I posted. Anyway, I hope the fonts are normal now. Sorry for the inconvenience.
For your easy reading, I am re-posting last night’s blog here for easier reading.
11:00pm Sunday 27 June 2010
According to an analyst that I follow, the DJIA “failed at its declining 50-day moving average.Even worse for the bulls was its failure to attract buyers at last week’s breakout area and 200-day moving average near 10,250. This area may become resistance on a bounce moving forward, so traders should keep an eye out. While DJIA closed flat on Friday, it was well off the lows that could be showing some buyers in the low 10,000. This was where the majority of trading volume occurred in the past few weeks and could represent an area of support.”
He further wrote that:”The markets are at an area where traders need to show patience. Overall, most of the market indexes are right in the middle of their most recent highs and lows. The weakness shown this week was not promising at all, but there is the possibility that the markets will form a higher low in this area. This would be a positive sign, and could cement the recent area as a more important intermediate low. However, it is still too early to interpret the possibility that this will happen, and there is still the real possibility that the markets will flounder in this area for a while before breaking much lower. This is why traders need to show patience, and allow the markets to fluctuate until more clear patterns emerge. While it is tempting to try to pick the bottom of this pullback, traders are probably better served waiting for the markets to stabilize and present a better opportunity.”
Local traders may be wondering why our market is slightly out of sync with the weakness in the global markets of the past week. My only answer is that there are quite a number of special situations which are too compelling to ignore. MBT for instance, as a proxy play for the economy, may just exceed expectations. While this presents a very strong possibility, the market may just have moved ahead of itself already. I would not chase MBT at this point and try to wait for a consolidation. I feel the same way for AEV, AP, URC, RLC, and even DMC. I would use any steep correction, nevertheless, to accumulate these stocks in the coming days or weeks, and I will be patiently waiting.
For stocks like DGTL which to my mind has gathered a lot of following and momentum, I would take bold moves and ride the momentum. For the likes of PNB, EDC and FGEN, I think that they remain at the low-end of their recent range so I do not think it very risky to position trades for these issues.
As the man who analyzes the developed market say, the real virtue in this market is patience. Ask any businessman, patience is what you really need for a sustained stream of profits. I wouldn’t argue against that idea.
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