STOP TRADING !!!!, STOP TRADING !!!!, STOP TRADING !!!!
Due to the current conditions of the market for the 3rd consecutive week, I recommend that many investors that are non professional should cease and desist from trading. We are still in a very strong BEAR MARKET and there might be much more downside pressure in the near term. Please take this free time to study the stock market, fundamental as well as technical analysis.
There are many websites that define the meanings of both terms and also teach investors a little bit about the stock market. You can find information via google, msn, dogpile or many other search engines. A great website for beginners that I recommend is moneycentral.com. I also have a few technical trading videos on youtube that you can also take a look at, simply type in marlinrolle or wizzwatch into the youtube search.
November 21, 2005 was the first time the Dow Jones Industrial closed above 5000 points. The question is, “will we reach those price levels before moving higher”.
The problem with a lot of investors is the fact that they don’t want to stop trading. They continue to hold on to losing stocks as they go lower and lower. Other are listening to rumors or taking very bad advice from friends. Take for instance six months ago if you were to ask anyone on a street if (C ) Citicorp or (BAC) Bank of America stocks were cheap. They would have told you yes and they were great values at the prices that they were trading at. In September of 2008 Bank of America was trading from $27 to $38 per share. Citigroup shares were trading from $17to $23 per share; today both are trading below $3.50 per share.
The main thing all investors should pay very close attention to is how the markets work. What’s moving in comparison to what is not moving as well as why are certain stocks are moving higher and for what reason. Many traders professional and non professional never pay attention to the three main indices. It’s very important to pay close attention the Dow Jones Industrial Average, The Nasdaq, and the Standard and Poors 500. It is crucial to make sure you understand the market especially in these rough times. I’ve been studying the stock market for over 17 years and I’ve never seen the market like this. I thought the months that followed the fall of the markets in March 2000 and the days that followed September 11, 2001 were bad.
All three major indices there were continued declines. The Nasdaq, the Dow Jones Industrial Average, and the S&P 500 have been on a 4 week decline.
In March of 2008 the Dow Jones Industrial average were trading at 13,136.69. To end the week the Dow ended the week below it 5, 10 and 50 week moving average. The index ended the week trading at 6,626.94 down -435.99 or 6.17 percent on heavier than average downside volume of 11.38 billion.
At the Nasdaq there have been declines across the tech weight index. The Nasdaq continues to fall after moving in a sideways consolidation for about 21 weeks before free falling for the past 4 weeks. The Nasdaq ended the week trading at 1,293.85 down -83.99 or 6.10 percent on heavier than average volume of 11.78 billion.
The Standard and Poors 500 has also seen four week of declines as it trades below its 5, 10 and 50 week moving average. With the fall of the financials as well as commodities we will continue to see future declines. The S&P 500 ended the week trading at 683.38 down -51.71 points or 7.03 percent on volume of 31.79 billion.
As for the Gold Index there was a slight increase in the price of gold. The index was down most of the week but finished the week on the upside. The Gold Index ended the week trading at $942.70 per ounce up +0.20 or 0.02 percent. The index continues to move above its 5, 10 and 50 week moving average. If the worldwide markets continue to decline we will see the price of gold move much higher taking out 2008 highs.
On the oil front the index has been moving to the upside for the past 2 weeks. A move above $51 per barrel will take the oil index higher in the near term. The index has been moving in a sideways consolidation for 13 weeks from $51 to $35 per barrel. During the months of April through October oil historically moves higher. Pay very close attention to the stocks in the oil sector such as (XOM) Exxon Mobil, (CVX) Chevron and (PDO) Pyramid Oil & Gas to name a few.
By: Marlin Rolle
*** Please have a close look at the charts below ***