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 10-02-2009
The Dow continued lower Thursday on higher than expected new unemployment claims, and a weaker ISM report. The Dow closed at 9509 after touching the 9500 level.
After reviewing the charts of the DOW, the upward channel that started in March has 9275 as support. This leaves another 225 points on the down side, before we get a confirmed breakdown of the latest bull market.
Tomorrow, we get the employment numbers at 7:30 CDT. The market is ready to sell if we get disappointing numbers.
The rally may be finally running out of gas. The two forces affecting the market are earnings and the weak dollar. The acceleration of earnings for the third quarter will be less than the second quarter, meaning we may have peaked. Conversely, a weaker dollar pushes the indexes higher. Which force will take control?
The play on the financials is the XLF and the SKF. The XLF is long the financials, and the SKF is double short the financials.
The play I chose Thursday was to buy a call on the SKF. The FFW JB call was selling for $.90. It closed at $1.15. If we get weak earnings from the banks, the SKF can easily gain 10-50 points, making the option jump a similar amount.
Protect your positions, or play with small amounts.
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