Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19
US Tech Stock Sector Setting Up for A Momentum Breakout Move - 12th Feb 19
Key Support Levels for Gold Miners & Gold Juniors - 12th Feb 19
Socialist “Green New Deal” Points the Way to Hyperinflation - 12th Feb 19
Trump’s Quest to Undermine Multilateral Development Banks - 12th Feb 19
Sheffield B17 US Bomber Crash 75th Anniversary Fly-past on 22nd February 2019 Full Details - 12th Feb 19
The 2 Rules For Successful Trading - 12th Feb 19 -
Financial Sector Calls Gold ‘Shiny Poo.’ Are They Worried? - 11th Feb 19
Stocks Bouncing, but Will They Resume the Uptrend? - 11th Feb 19
EURO Crisis Set to Intensify: US Dollar Breakout Higher
Stock Market Correction Starting? - 10th Feb 19
Gold Stocks Gather Steam - 10th Feb 19
Are Gold Bulls Naively Optimistic? - 9th Feb 19
Gold, Silver Precious Metals Update - 9th Feb 19
The Wealthy Should Prepare to Be Soaked - 8th Feb 19
US Business Confidence Is Starting to Crack - 8th Feb 19
Top Myths and Facts about ULIP Plans - 8th Feb 19
A Major Stocks Bear Market in 2020? - 8th Feb 19
Gold Market Extremes Test Your Mettle - 8th Feb 19
The Venezuela Myth Keeping Us From Transforming Our Economy - 8th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

Stock Market Monthly Analysis and a look at RIM

Stock-Markets / US Stock Markets Jul 17, 2008 - 11:18 AM GMT

By: Christopher_Quigley

Stock-Markets

Best Financial Markets Analysis ArticleThe bear market in US stocks which was initially flagged by the Transport Index in July 07, and was confirmed by the Industrials in October 07, is gaining pace as can be clearly seen in the chart below: the industrial index has crashed through the red 200 day moving average (dma) line.

High oil prices, a crashing real estate market, growing banking troubles and falling consumer confidence all indicate that this bear still has more legs. As with all pullbacks, at some stage it is reasonable to expect an oversold bounce, but given the current market sentiment I would not participate in any long strategy until the earnings season is over. Thus I advise waiting until the forth week in July before considering investing on the bull side.


If you wish to short the market I recommend using QID the ultra short ETF that doubles any slide in the QQQQ tech market index and is twice as efficient as shorting the QQQQ's directly. As always the ideal place to enter this type of trade is when a basing or consolidating position has been broken.

The Transport Index meanwhile continues to confirm the bearish trend but has not yet broken the 200 dma line.

Of course there is another issue facing the market that is adding to the perceived risk, namely the Middle East . Should additional conflict start then the situation could become too risky to judge and the prudent place to be would be in cash. Many may decide to go long oil however, I would avoid this temptation as oil is very overbought and is due a correction. The smart money always sells when everybody else anticipates buying.

A trade which momentum investors may wish to consider at this juncture is the gold ETF: GLD or the silver ETF: SLV. With US banks going into receivership and Fannie Mae and Freddie Mac being bailed out (nationalized) inflationary pressures have to grow due to the debasement of the US dollar. Such inflationary policy has to favour the money metals.

As with all such trades our normal stop loss protection should be put in place.

Monthly Stock Pick

From my point of view I believe that there are great growth stocks out there that are being oversold by herd sentiment. In any bounce, or turn in the market, these stocks will quickly recover because they offer real value based on the wealthbuilder model which highlights earnings, return on capital and growth.

I recommend that student-clients keep Research In Motion (RIMM) on their watch lists.

RIMM is a top-notch technology company that owns the Blackberry mobile products that are becoming ever so popular with the advent of wireless broadband and 3G systems. The company develops and manufactures wireless hand-held devices and radio modems, and provides related services for mobile computing and data communication. The company's Blackberry services allow users to send and receive e-mail and access personal information functions, including calendars, address books, and task lists.

Fundamentals should continue to benefit from a solid portfolio of products and healthy channel expansion in both North American and international markets.

Return On Capital: 20%

Financial Strength: A+

Projected Growth: 70%

As always use technical analysis to position your buy point. This would be a bullish price action, moving off a moving average line on above average volume. The converse of this would be a sell signal.

That's all for now. The next market brief will be posted mid-August.

Thank you and the best of luck.

By Christopher M. Quigley
B.Sc., M.M.I.I. Grad., M.A.
http://www.wealthbuilder.ie

Mr. Quigley is 46 years of age and holds a Batchelor Degree in Management from Trinity College/College of Commerce, Dublin and is a graduate of the Marketing Institute of Ireland. He commenced investing in the Stock Market in San Francisco, California where he lived for 6 years. Now based in Dublin, Mr. Quigley actively trades utilising the principles set out in the modules above. This Wealthbuilder course has been developed over the last 9 years as a result of research, study, experience and successful application.

Christopher M. Quigley Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules