DJIM #35 2008

Back to school!   As we witness millions of kids heading back to school, we as traders are wondering if we ought to be doing the same thing?    The only thing is, there's no such thing as a school for us traders and the most appropriate term would be for us to go back to the drawing board.   It is clear investors are overwhelmingly negative, there is plenty of reasons to remain bearish and we just have to trade with that always in mind.

Yes people, we are officially entering the last 4 months of the trading year and it can mean "do it or die" time for many of investors/ traders.  During the last three months, market has hit an intra year low and we are currently about 1000 points below where we were at the beginning of June.    By the way, we are also 600 points or so away from the intra year low.    This is a pretty gloomy picture, right?   Well, many of us have concluded that  "it could've been worse"!    More importantly, now that the volume will supposedly return to this market, where do we go from here?.  Did the major gloom areas trough mid-July?

Right now,  just about every issue that have been haunting the market three months ago is still deeply entrenched among traders' minds.   There hasn't been any indication that any of the market issues are anywhere near the end of its cycle.   On the contrary, not only are we unsure about how everything will unfold from this point on,  we have other market moving agenda that have popped up during the last couple of weeks.

Here's a few things we'll be hearing over and over again next little while...

1.  Credit issue!   Many investment banks/brokerage firms are set to report their earnings in September and it'll be interesting to see how much more in writedowns they will report.    FNM/FRE duo is also going to be a headline grabber for the next little while until people are more comfortable with whatever decision comes with the capital structure issue.

2. Corporate earnings!   No matter what economic data comes out on a weekly basis, it's the earnings that matters the most to investors/traders.   This will be an area with the biggest question mark!    There's an apparent slowdown in global economy, but at this point we just don't know the full impact to corporate earnings, yet.

3. Oil and commodities!   Now that "Gustav" fever is almost over, apparently with more bark than bite causing oil to penetrate the $110 support area, what is it going to do next?.  Another downtrend will only be confirmed if the $100 psychological level is broken.  We like to think that oil is very much a global "demand and supply" issue and a slowing global economy cannot be healthy for oil and other commodities, but this is not something anyone has a firm grasp on at this point.

4. Election!   Government spending is the biggest spending out there.   Without knowing which administration is going to take up the oval office, a lot of bets are holding off until a winner is decided.

With all of the ongoing issues and prospect of more turbulent trading, we often wonder how we're ever going to get through 2008.   This is when we remind ourselves time after time why we do this gig.    Well, we simply love this gig!  We honestly wouldn't give this up for any other gig.    Bottom line, the next four trading months will most likely be the most exciting trading period of this year.    It's time to juice up our intensity level to finish the year in grand fashion.