Stock Phases - Stock Market Blog

Yet another pause of raising interest rates.  If you remember we had a two year period of rate increases until the Fed quite raising rates and finally let the economy catch up to everything they have done in the past.  If you would like you can go to http://www.federalreserve.gov/ for more information about the Fed’s moves.  Will this be enough to keep inflation at bay even with the huge housing slump we are having.  The good news is that consumer spending is still “brisk”, which is preventing the economic growth growing at a reasonable pace.

Yesterday the Dow had it’s biggest one-day percentage since October 2003.  The big day was also the biggest single day point gain since October 2002. The market is bouncing up then down, but overall the market is pushing higher.  How much higher the market can go remains unknown.   

I am amazed at the strength of the market. Last week we moved up nicely with the S&P 500 hitting an all-time new high. This week we have a flood of earnings coming out. If earnings are good then we should continue higher, but if they disapoint the markets expectations we could be in for a fall. Hold tight for a very interesting week.

We seem to be teetering on whether we will be continuing and uptrend or going lower. Earnings have been mixed.  As we saw on Friday when Caterpillar had poor results the market found a reason to sell off. I think that earnings not being better than average and the nice run we have already had in the stock market will lead us to a lower market in the near future.

It doesn’t surprise me that we dropped by so much yesterday. We have been having weakness in the markets for the past five days. We should have a dead cat bounce with the next couple days to compensate for the huge down move. Just remember that this could be a sucker bait move.

On the positive note, we are still in an uptrend in the long term.  On a daily and weekly basis the stock market is on a downtrend. I would expect the markets to continue it’s downtrend for the next couple months ending in October. Statistics say that October is the worst month in the stock market. With November usually having a nice bump up.

The Dow had a horrible day yesterday and with the futures looking bad today it could be a sign of the times to come. On a positive note we are still up for the week, but it looks like that will be wiped out upfront when the markets open.  As long as the markets can close the week out with a positive gain we are still in good shape. If we close the week out with a weekly lose I think we are going to see a lower market in the future. 

The absolute best way to save money is to not buy things that you do not need.  It’s sounds easy in theory, but it does take some serious discipline to do on a day to day basis.  The next time you are at the gas station and, out of habit, pick up a bag of chips and a pop you need to really examine whether you need it or just want it.  Be honest with yourself.  If your not your only hurting yourself financially.

This simple act might seem small, but a $3.00 bag of chips and a pop everyday for a year adds up quickly to $1,080.  If you buy this for twelve years you would of spent almost $13,000 and have nothing to show for it.  However, if you decided to change your financial future around and invested the money you would of created a small fortune just from that one action.  Let’s see what happens if every year for the next twelve years you invested that same $1,080 and were able to get a 10% rate of return per year. You would have $25,405 at the end of twelve years!  Imagine what you can achieve if you were you were doing more than one action to change your financial future!

Just as expected we saw the dead cat bounce in the beginning of the week moving up nicely off the past two weeks of weakness. Then the bottom fell out of the markets on Thursday and part of Friday. A good sign was that by the end of Friday we did see a glimmer of strength as the three major indicies closed higher for the week. However, on Friday we did test the some new lows for the month and are potentially looking for a new support level.

As expected the dow fell even farther yesterday losing another 1.57% or 207.61 points.  The stock investment community should hold tight as we are expecting more downward pressure in the coming weeks and even months.  The long-term trend is still up, but the pullback we are having is technically needed. We have had a great run the past year in the stock market and should have a pullback if the markets are going to position themselves for a move upwards in November. All good things come to an end and we are here.

The Dow Jones showed amazing strength by being down more than 340 points in the afternoon, only to end the day with just a slight loss of only 13 points.  Don’t get your hopes up yet.  On Thursday all three of the stock market’s indexes were down by at least 10 percent from their highs in mid July.  The is a classic definition of a correction in the stock market.  I would be surprised if the correction is over this fast.  We still need more time to consolidate.  This has been a very fast fall in the last month.  In my opinion, we aren’t done yet.