MARKET COMMENTARY

Wow, the markets continue to weaken, in spite of the widespread oversold condition. Bad sentiment still puts pressure on the bulls from making any attempt to rebound. So far, the Dow has been making a straight line down without any sign of bottom. There is not a single technical indicator can make any sense of the chart now. The only way to possibly still trade to profit under this circumstance is intraday trading. Otherwise, traders without open position must stay sideline while those with position can trail the market with trailing stop. But I do question if this is a worthwhile pursuit.

Looking at the way the market goes, I don’t think the Dow can make it very far for any rebound that occurs. To take advantage of the poor sentiment, I believe some professional traders are going to sell the market down whenever there is a small lift.

One of the bad news that hit market is joblessness. This is a key indicator for the health of the economy. Judging by the retrenchment announced by major corporations such as Starbucks, Citibank, and possibly GM, I believe the situation is going to get worse. It does show that we will not see any bullishness in the market for quite some time. For this reason, I recommend the buying of put LEAPS in major indexes to profit from the medium-term bearish trend.

The equity market will trade just half-day on Thursday in preparation for Independence Day in the U.S. There will be no market on Friday.

DJIA Daily Chart

The S&P finally made a clear break of the major support. Now, it also joins the Dow to begin its journey going down south.

SPX Daily Chart

The Nasdaq is making new low. In fact, it was the worse hit yesterday in terms of percentage of loss. It should be heading lower to reach the target support soon.

NDX Daily Chart

STOCKS TO WATCH:

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