Are we there yet…..?
Posted by Cire2222 on Jul 21, 2008
Now that we have kicked off the week I wanted to do a follow up on last weeks weekly chart that was posted here. We came down and tagged one of our weekly downtrend lines. Now the question was, and still is, was that a solid support level or is the true downtrend line yet to be tested? We have bounced before in this bear market and came right down to new lows, will it happen again? We kicked off this week with a slow light volume down day, however after hours reports from Apple and American express send the futures falling down in the after hours trading. As i type this the dow futures are down 100+ points. Of course this doesn’t mean we open that way but it does usually mean we will see more volume and more action in tomorrows trading. One thing I would recommend keeping an eye on is the dollar. If the dollar can give some significant strength in the next couple days I would expect some short covering to send it in a decent size rally. This will be bullish for the stock market. As far as earnings go, the financials have not given too much dissapointment letting me know that alot of the financial fears are baked in to this market. I think the big question many want to know is, will another large financial institution take a dump? Lehman, Wamu and Wachovia are a couple names that come to mind. Fears like that are what can keep investors on the sidelines waiting, these are the people that will come jumping into the market once they begin to feel they may have missed the bottom. Thats what can keep a short cover rally on the move.
