Capital Essence’s Investment Blog- 錢途集團

This is Capital Essence’s “Swing-Trader Bulletin” for October 10, 2008. Subscribers, please click here to login.

This is Capital Essence’s Market Outlook for October 10, 2008. Subscribers, please click here to login.

Editor’s note: this column was originally published on Capital Essence’s CEM News. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.

Good Morning. This is Capital Essence’s Market Outlook (the technical analysis of financial markets) for Thursday October 09, 2008.

Stocks closed lower Wednesday at the end of a volatile session as investors doubt that the emergency 50 basis point coordinated interest rate cut will save the world. Overall it was just another bad day on the Street. Although given the current circumstances, it’d be hard for investors to stay bullish.

Notably, bonds sold off hard Wednesday immediately followed the rate cut announcement. This is, in fact, a big psychological boost for stocks because it is a sign the credit markets might be in the process of unfreezing.

Despite the overall weakness, shares of American Tower Corp. (AMT) jumped 5.37% after the company upped its annual earnings and sales goals. Just so that you know AMT was featured in our October 6 “Swing Trader Bulletin” as a potential buy candidate.

Strikingly, financial and consumer staples stocks - like Kraft (KFT), Coca-Cola (KO), Kellogg (K), and Heinz (HNZ) – took the beating in Wednesday sell-off. Despite being defensive names, consumer staples stocks have been battered because institutional traders, a.k.a. big boys on the Street, are selling what they can due to margin calls and redemptions. But why financials? It’s well-known that the ban on shorting financial stocks ends Wednesday evening so the bears can’t afford to miss the “golden opportunity”.

Chart 1.1 – KBW bank index (daily).

Looking at the seven-month daily chart of the KBW bank index, or BKX, we can see that after showing a great relative strength in the past couple of weeks - thanks to the short-selling ban – the sector is starting to slip. As you can see, Wednesday’s decline had pushed prices below immediate support at the 58.50 area. Right now the most obvious level to watch is the July closing low, about 48.50. Not only that this is a very tough support, the stochastic indicator is also indicating an oversold condition, so it wouldn’t’ surprise us to see some sorts of technical rebounds in the days ahead. Immediate resistance is about 66.50.

As goes the bank so goes the tape, so to speak. Weakness in the financial stocks dragged down the board market with the S&P 500 index lost about 11 points or 1.1% to settle near 985.

Chart 1.2 – Standard & Poor’s 500 index (monthly).

As you can see, this is about as bad as it get. The S&P 500 index gave up all of the four-year gains in merely a year. But the fact of the matter is that the price structure is so washed out that the probabilities increasingly favor a sustainable rally. Our near-term technical work suggests strongly that the down-leg that started from September high at 1303 is near completion. So there is a pretty good chance that we’re setting up for some sorts of modest rebounds soon. In fact, we’ve been looking at the 960-940 area as a downside target with the intention of buying on dips into this level.

In summary: while Wednesday’s trading action was not a true capitulation in the traditional sense, the market is so oversold that the probabilities increasingly favor a counter-trend rebound. However, until the market shows the ability to absorb bad news, ‘sell the rally’ remains the most profitable strategy.

Until next time, good luck.
(By: Michelle Mai for Capital Essence)

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.

Editor’s note: this column was originally published on Capital Essence’s CEM News. It’s being republished as a bonus for the loyal readers. For more information about subscribing to CEM News, please click here.

這是Capital Essence對2008年10月9日(週四)的市場技術分析。

經過一天的劇烈震盪之後，由於投資者懷疑各國緊急降息50個基點能否拯救世界，美股收盤下跌。總體而言，昨天又是華爾街一個糟糕的日子。在當前的環境下，投資者繼續維持看多是比較難的。

值得注意的是，週三聯儲宣佈降息以後，債券市場立即出現強勁拋售。事實上，這對股市是一個巨大的心理推動，因為它是信貸市場可能進入解凍過程的信號。

儘管大盤表現糟糕，昨天American Tower Corp(AMT)提高全年盈利和銷售目標之後股價大漲5.37%。我們在10月6日的Swing Trader Bulletin中對AMT作出了買入推薦。

昨天金融股和日用消費類股(比如卡夫(KFT)、可口可樂(KO)、家樂氏(Kellogg)(K)和亨氏(Heinz)(HNZ)等)遭遇重創。儘管日用消費類股屬於抗跌型股票，但是華爾街的大玩家即機構投資者為了滿足追加保證金的要求和彌補虧損，所以選擇了大批出貨。那麼金融股為何暴跌呢？我們都知道，限制賣空金融股的禁令在週三晚間取消，因此空頭不願錯過這個“天賜良機”。

圖1.1 KBW銀行指數(日線圖)

在上面銀行指數跨度為7個月的日線圖上我們可以看到，受益於賣空禁令，銀行股過去兩周表現出巨大的相對強勢，但現在已經開始下滑了。我們可以看到，指數週三的下跌使得價格擊穿了58.50點區域的緊鄰支撐位。目前最應該關注的位置是7月收盤低點，大約48.50點。不僅因為這是一個非常強大的支撐，而且隨機指標正在發出超賣信號，因此未來數天出現一定的技術反彈是不足為奇的。緊鄰阻力位大約在66.50點。

俗話說，銀行往東，大盤不往西。金融股的弱勢也拖累了大盤，標普500指數下跌大約11點或1.1%，收於985點附近。

圖1.2 標普500指數(月線圖)

從上圖我們可以看到標普跌得有多慘。在短短一年裡，標普完全放棄了過去四年的漲幅。但事實是，標普的價格形態遭受如此重挫，因此出現持續反彈行情的可能性越來越大。我們對指數近期技術形態作出分析後認為，標普從9月高點1303點開始的下跌趨勢極有可能已接近尾聲，因此指數或許會迅速出現較大的反彈。事實上，我們認為標普跌至960-940點的區域將封閉下跌空間並迎來大批買盤。

總結：儘管從傳統意義來講，週三的行情並非真正的投降式拋售，但市場超賣如此嚴重，出現逆勢反彈走勢的概率在加大。不過，在市場有能力吸收壞消息之前，“逢高出貨”仍是最佳的獲利策略。

(本文作者：Michelle Mai)

注﹕Michelle Mai為Capital Essence(錢途集團)撰寫技術分析﹐並為包括市場趨勢在內的數份金融市場投資通訊的首席市場策略師。如欲每日盤前收到更多最新分析, 敬請訂閱。