Today's Comments (Short Term Outlook)                             Printer friendly

Update: 9:22 AM It looks like we will be seeing a huge gap opening to the upside today.  I don't think Google's results mean that much to the broad market.  If this bear is going to continue, today's big opening rally could be a very good selling opportunity.  I would look for a reverse down by the end of the day.  If I'm wrong, perhaps we are starting a new bull market, and that's not so bad.  But I am skeptical.  So much for not expecting much to happen today as I said below.  Stocks take a rest Stocks took a breather yesterday, after Wednesday's big rally.  Today is options expiration day and I don't expect too much to happen, but you never know.  Next week we'll probably get more of an indication if this was a bear market rally, or if we will see a push by the bulls to break above the prior highs. I had a very busy night on Thursday so I haven't had time to do any writing.  I am going to leave you with a small piece from today's commentary from each of the premium service's. Ebbchart: Merrill Lynch (+4.05%) headed for its third straight quarterly loss with $6.5 billion in write-downs.  Bad news became good news with analysts expecting markdowns in the neighborhood of $8 billion.  Anyway, write-downs are nowhere near what it used to be and the market is no longer in fear of it.  One might say that investors have already been desensitized to the whole thing.  In fact, its purging and cleansing effect on the financial system should be welcomed and deemed necessary if healing is to ever take place...   RevShark:   Although last night’s strong report from IBM failed to translate to some follow through today, the market held up nicely, and the fact that the relative strength was found in financials and not in the recent hot momentum groups is encouraging. Still, we would have preferred to see buyers act with more confidence today. Volume was once again abysmal and breadth was negative, but we were able to hold on to yesterday’s gains.   Meanwhile, we’re seeing the same sort of action that we saw yesterday after the bell. Despite a lot of talk about how investors were going to be disappointed with their results, GOOG delivered a stellar quarter, and is up over 75 points in after-hours hours trading. While the buying last night failed to carry over, GOOG’s status as a former momentum favorite may bring in some more money off the sidelines... Trader Fred: The stock market strength (blue line) has leveled off at minus two in the Region of Market Weakness (below the dotted green line).                       When the blue line is level or decreasing, it means gains in the S&P 500 Index will be difficult to retain. This chart typically tends to be a leading indicator of the market’s behavior by approximately two weeks. However, under unstable market conditions, the lead-time seems to decrease to a week or less. The S&P 500 Index scale (black line) is on the right. The Market Resistance Indicator chart monitors the C Fund’s Loss--Gain with respect to daily changes in the summed NYSE volume. Market resistance decreases as buyers outnumber sellers going from the Maximum Resistance Boundary (left green line) to the Minimum Resistance Boundary (right green line). The red diamond is today’s value.                         Today’s red diamond has retreated to the Neutral Resistance Boundary where sellers of S&P 500 stocks roughly equal buyers. This type of pull back is normal, especially after the astounding leap on Wednesday from the Maximum Resistance Boundary (left solid green line) to the Minimum Resistance Boundary (right solid green line). That's all for today.  Thanks for reading.  Have a great weekend! 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