Current Stock Market Indicators

Last Updated: June 9, 2008



1. FIT: Trading Range

The big bounce is over and now we'll probably break down to the lower end of the trading range to test 11,500 on the Dow. There is a good chance it will not hold.


2. SSE: Shakeouts

Shakeouts are still dominating. Many individual stocks were hit with huge losses even while the major indexes were marched back up to the top of the trading range. Nothing new about that, just a little more vicious than usual, since we're in a bear market.


3. WLF: Losers

Financial stocks are still in the spotlight. Even big dividend payers that appear to be values now are not, since many dividends are in danger of being cut. Next, I expect a pullback in crude oil prices to the $100 to $110 range to trigger a brutal profit-taking correction in oil stocks.


4. CMP: Up

Short squeezes in the major show indexes fueled the comeback rally, helped by Fed rate cuts and accounting tricks. Government buying of stock index futures will probably be used to slow the coming decline, but not stop it.


5. BRR: Buying pullbacks from overhead resistance levels

During the bounce this worked wonderfully as key levels were repeatedly blown out via short squeezes, for example ten-point stair step levels in the Russell 2000 index. I expect this to reverse on the way back down, so shorting bounces off support levels will be the way to play it. Wait for the bounces, short, cover on the extensions of the decline, repeat....

Detailed Explanation of Current Stock Market Indicators