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Market Direction: Uncertain, But Important Lows Are Still Valid

October 22, 2008 7:30 PM

womanthinking.jpgToday seemed to be a “tell” that there is more selling than buying interest as I said in another post that was appropriately named “why buy?”. With that said, I am not certain where we are headed here. If we get some more very ugly news, the lows may be taken out soon. There were buyers above 865 as I thought was likely, but I am still very skeptical. Look at it this way. If the market truly wanted to move higher, especially tech, they would have used Apple’s big numbers as a catalyst. Instead the market was sold hard. If good news from AAPL could not lift the market, just think if they had missed and we had Wachovia’s huge loss - the market would have got demolished. No, down 500 is not demolished by today’s standards.

Technically, we are still “ok” here as two important lows on the SP and Dow have held - for now. Today’s test of 865 on the SP may be a clue whether it will hold next visit in that range. My guess is no. But as I mention often, do not guess, especially in this market. If it clears, get out of the way is how I see things.  If we had cleared those key lows today the market would possibly have plunged 1000, maybe more, as sell programs would have been triggered.

News and earnings (or lack thereof) will continue to dictate direction. I cannot imagine that any company will have much good to say going forward. Most all will likely warn, guide down, or like Apple, have nothing much to say. Retail sales WILL be ugly going forward as I mentioned about 2 months ago when i saw retail stocks leading the market higher and I wrote that it was pure comedy and could not last.

In summary, be very careful and use stops, IMO. This is not a market to be guessing in.

Written by Tom@StockBlade.com · Filed Under General Investing/Trading Commentary 

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