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 9-21-2009
The DOW gained 36 on Friday to close higher for the 10 time in the last 12 trading days.
With Option Expirations closing Friday, it is common for the market to pull back 50% of the previous four weeks gain. This would mean a return to the 9500-9600 level.
The economic calendar for the week has Leading Indicators on Monday, FHFA home prices on Tuesday, the FOMC on Wednesday, Jobless claims and existing home sales on Thursday, and Durable goods, New Home Sales and Consumer Sentiment on Friday.
Most of these should follow suit and continue the less-bad theory, allowing the market to continue its climb. Although I say this tongue in cheek, I am trading the market in front of me, which is up. Eventually, the market is going to realize things are not going back to the good old days, and valuations will slowly drift back to the eight PE levels we had in the early 1990’s This translate to lower levels than we have today.
However, as long as nine of ten stocks are going back up, take the easy trade.
STEC has finally peaked at 42, and has fallen to 30 as of Friday. Look for a sell-off Monday, to the 26-28 range and then a bounce of 3-6 points for a quick gain.
I am still in CEDC, and am watching CETV for a quick trade up, then down.
The market is going to get very volatile, so trading actual stocks may incur more loss than trading their lower cost options.
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