DJIM #24 2010

Reading some articles around the web,  there's one article citing that the market has not made any progress in last decade.   It also give an impression that investing in the stock market has proven to be an unwise decision for many.    We feel this is the kind of ignorant message that most people just need to avoid.   Unfortunately, the investor has had this forced on him lately as they’ve unwound positions because of ‘supposed’  risk going forward.   Being an affluent investor, one has to have some good idea when to go full cash and when to go full invested.    People do not have to be crazy program traders that live for hourly moves, and there's tons of money that can be made on timely investments.

Last week's action proves that the market was a very good buy when it traded near SPX 1040.    We have been saying all along,  market needs hard data to prove that we belong in the 1000-900s and we need even stronger data that a double dip is coming along.    The news that China's export # came in much stronger than expected has made some people believe that the Euro debt may not impact that much to the global Economic recovery.    As far as China is concerned, this is the case according to their official.   To us, this is big news (US part notably) even though it's still premature to claim that all is well.     It's all about sentiment.    A shift in trading sentiment can be a big catalyst to lift this market above the recent trading range.    Right now, the 200 ma will be looked at closely, but if we get some encouraging Eco' news in the coming week, there's no doubt that we can trade above 1100 again.  In our view, the all important 20ma might be more important than 200ma if sentiment is changing.  A few closes over 20ma and 200ma may not be a factor as the market may just climb right past with improving sentiment being the tailwind.  This sentiment reading we didn't have last try at 200ma, now we may begin to.

For now, we just like to hope that most traders keep their emotion toward the TV screen as oppose to the ticker screen.   The World Cup may actually just be the break many people and this market need to restore some confidence back.    In the coming week, we'd have a couple of Eco' reports, as well as a couple of EPS reports from the likes of BBY and FDX.    Oh yes, it's the early birds for EPS season again.

Bottom line,  we'd like to see last week's positive momentum carried into the coming week.  Friday’s follow through action probably surprised a few Bears.  Now, market needs to show people that it's capable of going up for more than two days and sidelined money should come in for June Q end.