Stock Traders Daily - How to Trade The Market

Friday's Stock Market Analysis:  NASDAQ, Dow, S&P 500, Russell 2000

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January 29, 2010
BY Thomas H. Kee Jr. - Editor, Stock Traders Daily

(La Jolla, CA) This is the Newsletter sent to clients after the close on Thursday, January 28 2010.  On Thursday, the Market seemed to make up its mind.  The fat lady has not sung, so do not jump the gun.  However, now that the 3-pronged concern is out of the way, Smart money is a little more relaxed.  Those three issues were the FOMC, Obama, and Bernanke, of course.

Now that those are out of the way, the Market seemed to make up its mind.  Follow through is key, but thus far the bias is down.  Momentum declines are still possible. 

My downside target for the Dow is set near 9000.

Many of you had questions about the Strategic Plan, and the alerts viewers.  I have talked to Neal about everything, and he is ready to answer your questions.  Please use the 'live help' feature of the Members Area.  We will answer all your questions in real time, privately.

We always have a plan, and we always use risk controls.  Market surprises do not surprise us.  The recent Political issues have caused stress on the Markets, but they should not affect us.  We know what is going to happen in the future.  The Investment Rate Proves it.


Strategies Summary:

Updated 1.28.10

  • Strategic Plan:  We are holding DXD with strict risk controls in place.
  • Day Trading:  Every Day ends in cash
  • Swing Trading:  We ended Thursday in QID with strict risk controls in place.
  • Stock of the Week:  The trading plan for MON has been updated.
  • Lock and Walk:  Every Day ends in cash.
  • Position Trades:  We are holding TBT and 3 positions of cash. 

Trend Tracker

Trend Tracker is an automated correlated Market Timing and stock selection tool that trades QID and QLD exclusively.  It is a risk controlled strategy that allows anyone to control their risk and realize opportunities in any market environment, regardless of economic conditions, and without sacrificing time or lifestyle.  Download the Demo today, practice using it, then talk to us about using the live version, which trades real money.

  •   Trend Tracker DEMO for Members and Trial Members

Longer Term Analysis:

Our combined longer term analysis is offering bearish signals.  In fact, they are offering significant warnings.  Pay very close attention to the longer term down channels.  The Dow and Russell have each broken back into their respective down channels, after slight breaks, and the S&P and NASDAQ are hanging on by a thread.  Reasonably, the neutral channel shown in the longer term chart of the NASDAQ could take over for a while, if breaks occur there too, but respect still needs to be paid to immediate circumstance.  After all, what if that neutral channel is not respected?  If longer term down channels re-solidify, a significant decline could follow over time.  Instead of looking at the neutral support line, focus on the down channel support line for the markets we cover.  The Dow's longer term down channel support line is around 5200, for example.  That is concerning.  The recent declines could be the first sign of what is to come.  Watch carefully, and pay close attention to these down channels.  Immediately, with all markets combined, our longer term combined analysis is telling us that the Market is on the cusp of a very important bearish indicator.  In this case, "important" may be an understatement.


Investment Rate: 

We are long term Bears.  We expect a GREATER DEPRESSION in the next 5 - 10 years.  The Investment Rate explains why.  Find the link in the Main Menu.


Friday's analysis:

Our combined analysis for Friday tells us that the Market is likely to begin the day with  a bias to decline.  In addition, the charts tell us to expect lower levels if resistance holds.  Mid term down channels are now well-solidified, and longer term down channels have been re-confirmed.  These are bearish indicators, and when coupled with the immediate read of the near term charts, our combined analysis tells us to beware of additional declines.  The catalyst is initial resistance, so treat it as inflection.  If it breaks higher, expect a moderate increase.  If it holds, beware of aggressive declines.  Specifically, if 2190 holds, expect 2164, and then beware of aggressive declines if that breaks lower too.  However, if 2190 breaks higher, expect 2204 instead, and then be ready for a turn lower.


Raw Data - Intended to be used to trade the Market

Here are the raw data parameters for the three markets we follow.  The charts used to define these parameters can be found on our website.

 NASDAQ

Initial intraday trading parameters for the NASDAQ exist between 2164 - 2190

If 2164 breaks lower expect 2141

If 2190 breaks higher expect 2204

Otherwise expect 2164 - 2190 to hold

DOW

Initial intraday trading parameters for the DOW exist between 10005 and 10164

If 10005 breaks lower expect 9826

If 10164 breaks higher expect 10250

Otherwise expect 10005 - 10164

S&P

 Initial intraday trading parameters for the S&P exist between 1073 -1090

If 1073 breaks lower expect 1056

If 1090 breaks higher expect 1103

Otherwise expect 1073 - 1090 to hold.

Russell

Initial intraday trading parameters for the Russell exist between 598 and 613

If 598 breaks lower expect 539

If 613 breaks higher expect 620

Otherwise expect 598 - 613


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  • Free Support:  First, we offer support through email, phone, and through online live private chats.  This support is free, but no recommendations or trading advice is offered through these free venues.  We will tell you where to find answers to your questions, and help you understand everything that we do.  Start by sending an email to support@stocktradersdaily.com, and arrange an appointment to talk with someone today.
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Read some of our Proprietary Reports:

  • 2010 - The Year of the Increase - A precursor to market action in 2010
  • Sell Gold - Expect Dollar Stability - This was issued on December 2, 2009.
  • Top of the Market to you - Round 2 - Proves the next major top. 
  • S&P historical Valuation Comparisons - Compares today's market to past environments.
  • The Treasury Bubble is bursting - The case for higher interest rates.

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