On Track

I'm going to make a little correction to my last post. Instead of a pullback to DOW 10K with a run up, I'm now calling for a not so steep drawdown. Let's call it a pullback to around DOW 10,200 with a run up to around DOW 10,600 by year's end.
There now, don't you feel much better?

Going Forward

So I was looking for something like Dow 10,255 around October 30th. My call on the date was about 2 weeks too early. So from here we will probably fall back to somewhere around Dow 10K before we make another run up to close out the year.
Then let's say a drop to around Dow 10K during the week of December 1st with another run up to around 10,600 before the end of the year. OK? OK!

I Beg to Differ

I was just reading RS of Houston who if you don't know is a popular trader who publishes a newsletter. He said in his letter that "...this afternoon's sharp reversal was right on schedule and we view see this as confirmation of the beginning of a very nice correction."

Well, I beg to differ, my analysis tells me that we should be headed a little bit higher before any sort of pullback. As a matter of fact I see the Dow Jones Industrial Average going to around 10,255 by October 30.

As of this date the Dow has closed at 10,081.

I guess we'll see what's what and who's how in the next week or so.

3rd Quarter Recap 2009

The market has closed the week on a down note with the Dow posting a high of 9834.
This week marks the 2nd straight week of drawdown in the Dow. However, I still believe the 8877 area is still very strong support and the market is trading well above its 200 day moving average.

We have advanced some 3400 points in the Dow since the bottom in March and approximately 1100 points of that is what we have captured since we started to DCA back in.

If the market is going to challenge that support level of 8877 we should know by the 3rd week in October. Outside of that my analysis shows a run up to about 10,500.

So I am going to continue to DCA into the total stock market.

Done with MRGE

Well, that was a crappy bust. I bought this issue (1000 shares) at my price ($3.81) expecting $5.10 by end of July. The highest it got to was only $4.78. I got out at my stop ($3.43).
Let that be a lesson to you, don't buy stocks priced under $10.00. Regardless of volume. I suspect traders saw my resting buy @ $3.81 and filled it thinking they were going to make money on the way down. That didn't happen, I took their money and was glad to do it. But I was so married to my exit at $5.10 that I........well, you know.

More MRGE

So today MRGE closed at $3.52. This market has basically gone into a channel with the indicator of choice not issuing any signals. Sooooooooo, I am going to hold this for a while yet (against my own advise) and see what happens.
Tune in next week, same bat-time, same bat-channel.

Here We Go

So this is the 2nd week of trading above 8877 in the Dow. I'm now DCA over 12 months to get back in to this stock market.
8877 should be strong support. All major markets are trading above the 200 day moving average and everything looks ship shape.

The Total Market

This market has turned up. The low appears to be 8087. If this market goes through the resistance at 8877, my forecast for 7700 (approx) will be negated. Any close above 8877 in the Dow on a weekly basis will be enough strength to begin to dollar cost average back into the total stock market.

MRGE

OK so this morning, before the open, I put in an order to Buy MRGE at $3.81 and the low of the day, today, turns out to be $3.81. I was filled and the market rallied and closed at $4.06. I am now long this market from $3.81. The position is currently in profit.
There is still some danger for drawdown but I have placed my stop as stated in yesterday's blog.
Let's see what happens tomorrow.

Swinging a Stock Operation

I was doing a little sector analysis and I believe I have discovered an interesting opportunity in the short term for a particular stock called Merge Technologies, Inc. (MRGE). This thing has a strong trend line and is currently cheap. It is a sector leader and lends itself well to compliance with my operation.

I believe this stock will be a BUY at a price of $3.81.

On Monday, July 13, 2009, before the open, I will place a limit order to buy this market at $3.81. I will also place a contingent stop at $3.43.

I expect to be filled on or before Wednesday, July 15, 2009. I expect to be long this market until the price reaches $5.10 which should happen before the end of July.

This is what I'm doing. You should NEVER do what I do.

2nd Quarter Recap 2009

The 2nd quarter of 2009 is in the books. The stock market has staged a strong come back from the bottom that was formed in early March 2009. What’s amazing is the “V” type bottom that has formed. You don’t see a bottom like this very often. The Dow ran up against a little resistance on the daily chart at around 8900 forming a channel with a floor close to 8500, and now 8500 appears to be resistance. Further, it does not seem to want to trade with any conviction above the 200 day moving average. An indicator that most traders watch for conformation of trend. I’ve been expecting to see some sort of significant pull back before we can start to believe the Bulls are in charge. At this juncture, if we think the current high is going to hold then we would not be surprised by a pull back in the Dow to somewhere between 7700 and 7400 and we would expect to see this price sometime in early August 2009. But this market has not acted rationally since the sell signal was confirmed in January 2008. Therefore, we proceed with caution.


Return YTD as of 06/30/2009

The Highest U.S. Money Market Fund 1.98 %

The Average U.S. Lg. Growth Stock Fund 10.46 %

The Average U.S. Int. Government Bond Fund 1.58 %


We should be making regular contributions of new money back into the total stock market. The pile of money that we removed earlier is still sitting on the side. We will keep that there until we KNOW the bottom is in place. At which time we will begin to aggressively dollar cost average that pot of money back in to the total stock market.