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Market Direction: Monday, Mild “Relief” Rally Possible

June 29, 2008 10:54 AM

It appears that we may get an attempt to hold the line here for a possible small rally, but I am not certain of it. There are numerous stocks that rejected the lows on Friday including AAPL, RIMM, UPS, the transport ETF IYT, QQQQ, etc. If we open flat to slightly lower, look for an early reversal attempt on both the Dow and SP.

Do I believe we have seen the ultimate lows? I would say almost no chance. But for now, this is what I would look for. Keep in mind, if futures are way down Monday, then this would change.

If you just have to be long this market, pick out one of these and look to be long above Friday’s low. Mininmizie your risk here (as always) and try and be long as close to the low as possible. If it clears, I would personally exit as it is possible the market could continue to slide. I personally think the market will go lower, just maybe not tomorrow.

Written by Tom@StockBlade.com · Filed Under Pre-Open 

Comments

11 Responses to “Market Direction: Monday, Mild “Relief” Rally Possible”

  1. mikey on June 29th, 2008 6:41 pm

    Could you provide us with your ultimate low projections and Timetrend pivot dates? Please update your Current SB Numbers. Thanks!

  2. Tom@StockBlade.com on June 29th, 2008 9:59 pm

    Hi Mikey,

    I let the market tell me where the lows are. Why project (guess)? If I project, I could project wrong. I see no value in it.

  3. Tom@StockBlade.com on June 29th, 2008 10:00 pm

    Also, I know, I took the SB numbers off the board as I havent updated them. Most have likely cleared the low must hold number anyhow (why the market tanked).

  4. Scott on June 30th, 2008 7:21 am

    oil heading up. Does not look like a rally in sight for today

  5. mikey on June 30th, 2008 7:26 am

    My downside target for DJIA is…………………..10800.

    Why? It represents a 50% Fibonacci retracement from the high.

    And, look at a monthly chart of the DJIA spanning from 1985. Notice that their is a significant support/resistance line at DJIA 10800 level. Trading below represents resistance, while trading above represents support. Now, draw a longterm trendline by placing a straight edge under all the bear market lows of the past 20 years. (always extend the trendline beyond the current close).

    Do you see how the longterm trendline intersects the support/resistance line at DJIA 10800? This results in a peak-to-trough decline of about 23%.

    Cycle bottom should be in August at the Democratic Convention. Once the DEMS confirm the nomination of Barack Obama for President - the bottom will be in and then we rally BIGTIME (financials will bottom once the moneycenter banks hit their tangible book value). Wall Street hasn’t factored in the strong probability that a Democrat will be occupying the White House next January.

  6. mikey on June 30th, 2008 7:32 am

    CIT Group. Will America’s largest Commercial lender survive?

    Consensus estimates are for CIT to reach $16 next year. What is your opinion?

    I have CIT-PZ on my radar but fear they will suspend the dividend despite $3 billion capital infusion by Goldman Sachs.

    I’d also like to hear your opinions on the monoline bond insurers. Can they survive without their AAA-rating? Can we trust Moody’s/Fitch ratings anymore?

    Thanks!

  7. Tom@StockBlade.com on June 30th, 2008 2:57 pm

    I would not touch C or Bank of America with a 10 foot pole - toooo much risk.

  8. Tom@StockBlade.com on June 30th, 2008 2:58 pm

    I do not like the tech action today, i would sit this one out on techs and wait for clarity…well, the clarity is we are almost certaintly going lower, lol. Its just a matter of when, IMO

  9. Tom@StockBlade.com on June 30th, 2008 3:11 pm

    Hi Mikey.

    I know all that fibonacci stuff…maybe it is useful, maybe it isnt. I personally ignore it. It is good to know its there, i guess, but if the market says its not the low, then its not the low.

  10. Tom@StockBlade.com on June 30th, 2008 3:13 pm

    Well, the market has played out almost to the T of what i said…early weakness was bought…check…..watch out for a late reversal…check…and now we are just sitting here

  11. Tom@StockBlade.com on June 30th, 2008 3:17 pm

    I definately would not be long near todays high..unless it clears with conviction…I smell a trap

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