Weekly Update

By: Angelo Campione | Sun, Dec 7, 2008
Print Email

12/7/2008 7:15:00 PM

Welcome to the Advantage Report, this report summarizes the general market as well as the Nasdaq 100 and issues BUY or SELL signals when the conditions present themselves.

Bigger Picture

In the bigger picture, not a lot has changed from last week, except that we're getting closer to turning medium term positive as is seen by the circled area, also we still have the divergences discussed last week. Note, it could still take another couple weeks to have this picture turn bullish and the first sign will be when we get a break above the down trend line on a closing weekly basis. It's shaping up well so far.

Smaller Picture

In the shorter term, Monday's big reversal at resistance looked as though we were going to tank again, but we managed to consolidate for the rest of the week and we're now at resistance again. If we go higher this week, 940 - 950 will be the next big target (the circled area).

More weight for a turnaround is building as the market held up reasonably well in the face of negative news. If the market senses that things are going from bad to less bad, that's all it needs to initialize a rally and the technicals are supporting that scenario at this point.

For next week, support on the SPX remains around 825 - 850 and resistance at 900 - 950.

The VIX Picture

The VIX seems to be going sideways for now, a break above 65 will be negative for the market, while a break below 55, will likely have the market rally. If we go below 55, we'll probably see 45 fairly soon.

Looking further out, a close below 45 is needed for a confirmation that stability is returning to the market. That's likely to be the case when a break above 950 on the SPX happens.

The VIX measures the premiums investors are willing to pay for option contracts and is essentially a measure of fear i.e. the higher the VIX, the higher the fear in the market place.

NDX Chart - Shorter Picture

The Nasdaq held support around the 1100 level this week and finished the week near the 1200 resistance level. Overall, things are shaping up nicely for the NDX also and a break above 1200 should take us to around the 1300 level (the circled area).

In the wider context, a break above the 1300 level is what's required to really put a positive spin on this market.

For next week, support on the NDX remains at 1100 and resistance is 1200 - 1280.

General Commentary:

Both the SPX and NDX are now on a full BUY signal.

Last week we re-entered our long position on the SPY and we remain long on the QQQQ's.

The market had quite a good week in the face of a 9% plunge on Monday. Under the circumstances of the last few months we would have continued to slide in the face of the negativity but the fact that we were able to consolidate from the lows shows that we're starting to get to a point where the sellers are becoming exhausted. And we all know what happens when sellers dry up.

Having said that, we're not out of the woods yet, but the picture is beginning to look better that a sustained up move is imminent. Also the fact that our internal system is on a full buy signal now is encouraging. The ultimate sign of a turnaround though, is when we begin to see higher highs and higher lows, that will start when we go above 900.on the SPX and 1200 on the NDX, and that could happen this week.

Quote of the Week:

The quote this week is from the Dalai Lama, "I find hope in the darkest of days, and focus in the brightest. I do not judge the universe."

Feel free to email me at angelo@stockbarometer.com with any questions or comments.

If you are receiving these alerts on a free trial, you have access to all of our previous articles and recommendations by clicking here. If you do not recall your username and/or password, please email us at customersupport@stockbarometer.com. If you are interested in continuing to receive our service after your free trial, please click here.



Angelo Campione

Author: Angelo Campione

Angelo Campione
"Improved Speculation Through Timing"

About The Advantage Report Trader Alert:

The Advantage Report is a timing service that allows you to maximize profit in both bullish and bearish market, we have a proprietary system that issues buy or sell signals based on several algorithms.

The signals we have are:

BUY - This means go long in your desired investment vehicle.
SELL - This means go short in your desired investment vehicle.
PRELIMINARY BUY or SELL - This means be alert to a potential change of signal and be ready to take action shortly but DO NOT take action yet.
STOP - This means close your positions and go to cash

To Learn more about us: Click Here

Not a subscriber yet? Want to be? Click here and sign up for a no cost trial. Sign up for our TRADE TUTOR weekly newsletter at no cost to get a trading education from Pro Traders.

Important Disclosure:

Futures, Options, Mutual Fund, and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

There is a very high degree of risk involved in trading. Past results are not indictive of future returns. Stock Barometer and all individuals affiliated with Stock Barometer assume no responsibility for your trading or investment results.

Copyright © 2007-2010 Angelo Campione

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com