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Death of a Bull Market

 
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arthur
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PostPosted: Sun Apr 17, 2005 7:57 am    Post subject: Death of a Bull Market Reply with quote

When Julius Caesar was asked if he could choose his method of death, what would it be? He answered "To die quickly." The cyclical bull market, from Oct 2002 to Apr 2005, seems to have died a quick death. So quick, that the market is currently severely oversold.

The first chart is an SPX daily chart, since Jan 2004. SPX closed at 1,142 and created a gap at 1,162 Fri, when it opened lower. SPX also has open gaps at 1,137 and 1,198. The Price-by-Volume bars (on left side of chart) show there is strong short-term support at 1,100 to 1,140, since SPX consolidated in that area over most of 2004. Short-term resistance is at 1,153 (200 day MA) and 1,163 (previous lows of the bull market).

The second and third charts are weekly SPX and Nasdaq charts that show Fibonacci levels for the entire 2002-2005 bull market. Consequently, the stock market could fall much lower, later this year or in 2006.

Economic reports next week include: Tue PPI, Housing Starts, and Building Permits, Wed CPI, and Fed's Beige Book (report on regional economic activity), Thu Unemployment Claims, and Leading Indicators.

I believe, only three of the 30 Dow stocks reported earnings, so far, i.e. AA GE and C.

Notable earnings next week are: Mon before market open MMM and after the close TXN.

Tue: INTC KO PFE GM JNJ MER YHOO JNPR VIA WFC USB WM EMC FCX FRX TASR GILD KFT LU.

Wed: MO JPM HON SBC UTX CAT QCOM EBAY PMCS F ET BK WYE STJ FON YUM GD MOT VRSN.

Thu: MRK MCD T UNP AMGN SGP GENZ BRCM GOOG TARO SNDK IR BMS CY CLS DAL DCLK JBLU NOK SFA SMSI SSTI VLO REY VTSS WY XRX WHR ODP ARBA.

Fri: IP EK HAL MYG.

A volatile market can be an excellent trading market. Nasdaq closed at 1,908. Perhaps, the short-term trading range is 1,900 (a previous support level) and 1,971 (a Fibonacci level, see first chart in Chart Room). Also, I wouldn't rule out the possibility of SPX closing the gap at 1,198 before settling in a fast moving trading range (perhaps, 1,100 to 1,140).




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