Stock Market
All comments and Stock Market Ananlysis are made by Guy Brumley. Guy has been trading the Stock Market daily since 1992.
Trading, evaluating stock prices and predictions
Stock Market Commentary 7-2-2009
The DOW closed with a 57-point gain, Wednesday, but was 76 points off its intraday high. The 8600 resistance held, with the high of the day reaching 8580.
The ADP numbers were weak, as expected, but the manufacturing numbers were less bad than feared. The net result was more noise.
The talking heads are doing their best to cheerlead the market.
- “The second quarter numbers are the best since 1998.”
- “The second half of 2009 started with a major up move.”
Last I looked, we are still down 5500 points from the all-time high, down 272 from January 1st, and unchanged from May 1st. The only people that have made money in the market are a select group that meets these two qualifications. First, you have to have invested after March 4th and before May 1st, and second, you had no money in the market prior to March 1st. You only have a 7-week window to have entered the market.
The market is very fragile at this time. The uptrend we were experiencing in March and April has died off in May and June. The moving average target of 9500 from the May 1st chart has continued its downward slope and is now at 8950. The trend line target has also sloped down to 9200.
One market play from the Trader’s Almanac is, the day before and the day after a holiday weekend is positive seven out of every eight times. We should be able to buy Thursday morning, and sell during Monday’s session for a profit.
While the market could be rolling over, the new high list is getting more active. We had 71 new highs today, (NASDAQ and NYSE), versus only six new lows.
One of the more interesting stocks is STEC. The stock has run from $5.00 in March to $25.49 yesterday. An impressive run, but we are late to the party. The company has raised guidance twice in the last two months. It has a float of 40 million shares, making its market cap right at $1 billion. The new earnings guidance pushes the quarterly earnings to $14 million, meaning 47 years to purchase. The company manufactures computer chips, and if it can grow like Intel or AMD, it has possibilities.
It is definitely a buy on a pullback, which could be as much as 6 points.
Return to Previous Market Commentaries