How many of you realized that the DJIA finished up for the week ending March 14, 2008? It’s amazing how quickly the glory day of a 400+ point gain can be washed away in our minds. The S&P 500 dropped 5 points, the NAZ was flat and the Russell 2000 was down 3. Not too bad considering how the last three days rolled down hill.
The biggest take-away from the chart below is that we are still in the trading range that includes the bottom from mid-January. The DJIA is also hitting the lower trend line of lower lows. It’s interesting to see these two lines coming together. One will win out, support around 11,650 or the trend of lower lows. Neither would surprise me, but I have to lean to the support will hold side based on the end of the day rally on Friday. I think a lot of investors are spooked out of the markets at this level and we’ll continue to have big rally days when we hit the lower areas of the chart.
That said, watch out for the declining trend line of lower highs which is currently almost touching the ceiling level from recent weeks around 12,500. Selling rallies can continue to be a fairly smart/safe move.
On a non-financial note of interest, I took some pictures yesterday of the tornado damage to downtown Atlanta and posted them on my sister site, http://mytradersjournal.com/photography/. I didn’t get any good pictures of the glass all over the streets, but it was insane down there with a lot of major streets blocked off. Another tornado hit the area about two hours after we left the Georgia Aquarium.
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I did realize it but I sort of cheated. It was mentioned on NBR. The collapse of a major Wall St. institution will do tend to wipe out gains. I think next week could be good if BSC gets sorted and the Fed cuts the right amount. Right being high enough to satisfy recession fears and low enough to avoid inflation worries.
No kidding, it’s a tight-rope act with the Fed. I don’t even know what I want them to cut yet – 1/2, 3/4 or a full point?
Um, crap. JP Morgan (JPM) buys Bear Sterns (BSC) and Fed cuts rates.
Ugh, more sh/t hitting the fan. It’s going to be another wild week. Futures are down 200 this morning, but still above the 11,650 range I mentioned above.