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 8-14-2009
The DOW close up 37 points Thursday, on the high of the trading day. It is encouraging when you see buying into the close, because it represents Big Money trades. This is why watching the volume is so important.
Today being Friday, look for a quiet day, with the major moves being in the morning, if not the first 2 hours.
It has been a quieter week, with the volumes every day being below average. The temptation is to short the rally, but the rule is do not short a dull market.
I am starting to hear there is a slight up turn in the economy. The workweek has expanded, not contracted in the last month.
The latest chart formation for this recession makes me laugh. The “V”, “L”, “W”, “U”, or “M” bottoms are all old standards, and now the current guess is the square root sign. That is original, and right now, it fits. We have the rally off the bottom, and now we go nowhere for a quarter or two.
Personally, there is more emotion left for the market makers to take our money. People who bailed on the market early in the year are still sitting on the outside looking in. The emotions of Fear and Greed are being upstaged by Regrets and Envy.
People will sit on the sideline until they get the same emotional push (Pain) they felt when they quit. This time instead of the Pain from losing money it will the Pain of missing out.
I have always traded using a fundamental slant for valuing stocks. This does not work in today’s market, because the economic engine is broke. There are too many moving parts to make a huge bet in any direction.
Long term, the last 80 years of spending and borrowing are not available to the next generations. To make money in the future, we may have to do it the old fashion way and earn it.
Return to Previous Market Commentaries