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 6-30-2009
I have been away on personal business for the last week. The market has been trading in a narrow range, but can have big swings on the weaker volumes.
The Dow rallied Monday gaining 90 points. One of the main forces driving the rally was “window dressing”, where mutual funds load up on winning stocks, and dump there losers. It makes them look smarter. They dump stocks like Yellow Freight, down 50% year to date, but buy stocks like GS, which is at 149, up from 80. Thus, the losers go lower, and the winners go higher. After the second quarter books are closed, they usually give back much of their runs.
The gains of the week are on lighter volumes. The DOW is staying within the 8200-8600 trading range. If we breakout, in either direction, it will be easy for market makers to generate momentum.
The new high list has FUQI in the lead, setting a new high on almost twice-normal volume. This is exactly what to look for as a stock begins a new move. I could not find any news to cause the run. Maybe it is strictly the China factor. Look for another 2-3 points.
Another Chinese stock from a couple years back is KONG. It gained $1.03 to $10.98. This has another 1-2 points before it hits a trend line, and it moved on twice its average volume.
When playing any stocks, remember it is OK to be wrong, just not wrong for long.
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