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.