1. If the sharpest decline is taken place in the strongest bull market, then this is one heck of a “bull”
2. What went up, must goes down
3. This is a lot of money
4. A broken clock is right “twice a day”. Yen up, market down. Yen down, market up.
Editor’s Note: The following article was written by Michelle Mai of Capital Essence. It has been reproduced with permission for the benefit of the S.M.R community.
Good Morning. This is Capital Essence’s “Market Outlook” (the technical analysis of financial markets) for Friday July 27, 2007.
Equity market rolled over Thursday with an average lost of 2.0%. A lot of traders, including yours truly, got shocked by the magnitude of today sell-off – the blue-chips index (Dow Jones Industrial Index) was down as much as 449 points (-3.3%) before a “mysterious buyer” stepped in and recouped about 1.0%. There were chatters that the US government, a.k.a. “Plunge Protection Team”, founded by the former US president Ronald Reagan after the ’87 crash, was the master mind behind the late day bounce. If this was true, then we might be able to escape the “black Friday”.
As noted above, the magnitude of Thursday’s decline was shocking though it isn’t unpredictable. Below is one of the charts posted on our Tuesday “Cubes Speculator Bulletin”:
As you can see, our “Cubes Speculator” proprietary trading program had flashed the sell signal on the NASDAQ-100 Index ETF (QQQQ) two days before the plunge. With that said, if you had traded in favor of this system, then you could have taken home a couple hundred percentage gains today on the QQQQ options.
Let’s take a look at the major indices:
The Standard & Poors 500 Index (daily) chart above addresses a short-term frame. As you can see, Thursday trading action was very similar to that of the February 27, 2007 in terms of magnitude, market fundamental and sentiment. Although, it’s beyond the scope of this newsletter to discuss these terms. At this stage, all we can say is that the overall technical outlook had taken a turn for the worse after Thursday sell-off; though, the bulls shall prevail as long as the index holds above the 1460 level.
The Dow Jones Industrial Average (daily) chart above addresses a short-term frame. Similar to the S&P 500, the blue-chips index also plunged more than 2% today though yet violated the two-month lateral support about 13200. As mentioned, the bull case remains intact as long as the index holds above this level. Short-term support is about 13200. Short-term resistant is about 14020.
Bottom line: as noted above, Thursday trading action was very similar to that of the February 27, 2007. If history is any guide, then we’d see a rebound tomorrow, which is likely to be followed by a basing or consolidation period, and then…up we go! In short, just like any other “heart breaking” decline in market history, this too shall past!
Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence’s “Market Outlook” newsletter. To receive the daily edition, please subscribe. It’s now available at a monthly rate.
這是Capital Essence對2007年7月27日(週五)的市場前瞻分析。
週四股市暴跌，平均跌幅達2.0%。許多交易者，包括本人，都被拋賣的規模震驚了——道指盤中一度下跌449點(跌幅3.3%)，最後“神秘買家” 出現，收復了大約1.0%的失地。市場傳聞稱，美國政府——也就是所謂的“暴跌保護小組(Plunge Protection Team)”，由美國前總統裡根在1987年股崩之後成立——是昨天尾盤反彈的主力。如果真是這樣，那麼“黑色週五”也許能夠得以避免。
上面說過，週四的下跌規模令人震驚，儘管並非不可預知。下面是我們“Cubes Speculator Bulletin”在週二貼出的圖表之一：
可以看出，我們的“Cubes Speculator”專有交易程序在暴跌發生前兩天已經針對納斯達克100指數ETF(QQQQ)發出了售出信號。如果你根據這個系統來交易，那麼昨天就可以在QQQQ期權交易中獲利幾百個百分點。
來看主要股指：
上面是標普500指數的短期日線圖。可以看出，週四的交易在規模、市場基本面以及情緒等方面與2007年2月27日非常接近，然而這些超出了本專欄 的討論範疇。眼下我們能說的只是：週二暴跌之後，整體的技術面形勢已經惡化，但只要該指數能夠保持在1460點上方，多頭就仍將佔據上風。
上面是道指的短期日線圖。與標普500指數相似，道指昨天也下跌了2%以上，儘管尚未跌破約為13200點的兩個月橫向支撐。我們說過，只要該指數能夠保持在這個水平之上，牛市就未遭破壞。短期支撐位約為13200點，短期阻力位約為14020點。
總結：上面說過，週四的狀況與2007年2月27日非常相似。如果歷史可以作為參考，那麼今天就可以看到反彈，緊隨其後則可能是築底或盤整時期，再往後……向上！簡而言之，不過是又一次股市歷史上“讓人嚇破膽”的暴跌而已，這一次同樣會過去的！
Note: Michelle Mai writes technical analysis for Capital Essence and is the editor of Capital Essence’s “Market Outlook” newsletter. To receive the daily edition, please subscribe. It’s now available at a monthly rate.
1. Bearish bets on Nasdaq hit high
2. JP Morgan Asset Management has become the largest hedge fund manager in the world
3. Easy comes, easy goes
4. Stuffs like this usually come out at market tops
5. No magic formula for market crashes?
