09.30.08
20080930
Today’s rally has finished above yesterdays close, covering the gap from 19th Sep:
The WIG20 Index looks little bit more optimistic:
The session today gave me an impression of a reflexive rebounce, but we shall not expect anything. We shall just react. From technical point of view the tomorrow’s session can be critical. We have a possibility to create double bottom (with target price ca.41800, but not before we take out the last high) or to make a lower-low (which will give us another strong long-term signal).
There are tons of news and articles commenting current economy situation (check MarketWatch, Forbes or Bloomberg). Therefore, I don’t think you need another pile of information. Most of news are really pessimistic – maybe we are at true bottom now? Only the time can show that, right now it is safer to assume we are still in bear market.
Let’s take a look at currencies then. The CHFPLN is high (subjective opinion), but it well keeps to its channel as for now:
The EURPLN looks much more hectic:
The price made the higher low and crossed the important level of 3.37, but it still has not taken the previous high (3.49). It’s hard to say what is coming next (triangle maybe?), thus we need to observe it.
Update from 01/10/2008:
As for now it seems the market has choosen the first option and we are in short-term up-trend. Note the possible formation of double bottom with target ca.41800. I would not consider it a reliable formation before we cross at least the level of 39000:
Like Brian Shannon says: any rally in a bear market should be guilty till proven innocent. Trading against the trend (sell signal in long-term chart) is risky business and we generally are not skilled enough to do it.
Sources:
[http://www.gracecheng.com/stocks/2008/09/30/any-rally-in-a-bear-market-should-be-guilty-till-proven-innocent/]
[http://www.marketwatch.com]
[http://www.forbes.com]
[http://www.bloomberg.com]
09.29.08
20080929
Today’s session was really impressive. The WIG Index failed -4.18%:
The WIG20 Index failed even more -5.03%:
We have broken the resistance of 37300, which is pretty strong sell signal for short-term. We are still above the Sep low, but the short-term double tops pattern should be noted on both charts. Nevertheless, in such situation short-term forecasts are meaningless.
As for certain stocks, KGHM failed -11.69% as of today:
This weekend was a interesting one and there are few things are worth mentioning:
The largest savings and loan fund, Washington Mutual has serious problems now (here and here).
Citigroup takes the Operation of Wachovia (here).
The 700 billion USD rescue plan for US bank has been rejected today by House of Representatives (here). I won’t even try to guess what impact on economy this action could have. Look here for article and a huge number of comments. There is also huge number of other sources and discussions in the Internet (here, here or here). Noteworthy is this article from Sep, 1999 with some of the nowadays dangers highlighted (thanks to UFO Forum). Lots of useful information and news can be found here.
Make sure you watch Brian Shannon analysis today (here). “It’s better to be out of the market and wishing to be in, than be in the market and wishing to be out” – nothing is more true right now.
Sources:
[http://www.marketwatch.com/news/story/us-stocks-plunge-house-says/story.aspx?guid={7F45BE2A-0486-494E-B87C-76D9F2688338}]
[http://www.forbes.com/home/2008/09/29/wachovia-citigroup-financial-markets-equity-cx_cg_0929markets11.html]
[http://www.forbes.com/home/2008/09/28/bailout-financial-crisis-biz-wash-cx_bw_jz_0928agreement4.html]
[http://www.marketwatch.com/news/story/wells-fargo-wachovia-were-couple/story.aspx?guid={1865CC87-2BA3-4863-8F81-F3F9EED3261A}&dist=msr_4]
[http://bigpicture.typepad.com/comments/bailouts/index.html]
[http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=]
[http://news.yahoo.com/s/ap/20080929/ap_on_bi_ge/financial_meltdown;_ylt=Ak8s4k255lzwU9Y6KvAuHyKs0NUE]
[http://www.marketwatch.com/news/story/bailout-bill-unveiled-now-heads/story.aspx?guid={6209DA02-EC8E-4107-B78A-1B395F1A462E}]
09.26.08
20080926
As per chart, the WIG Index has confirmed its short term low (ca.37300) but is still below the last short-term high (ca.38800):
Similar situation on WIG20 Index: confirmation of a new short-term low (ca.2357), bur still below previous short-term high (ca.2473):
Therefore, nothing changed in the big picture and we are still in primary downtrend. Nobody knows where is the bottom. Under current circumstances in US economy and politics, playing on market is quite hazardous.
As for the question “how much more can we go down?” – there is no answer, but don’t believe in anything like “we are low and it can’t go lower”. Take a look at DJIA from 1929 and the answer is “we can always go lower”:
