Market Analysis and Forecast 2009 May 15

Market Analysis and Forecast 2009 May 15

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Market Correction Markets have shown a mild correction of 3-4% during the OE week as we anticipated. We have the FOMC minutes release on coming Wed which we already know that the Fed Bernanke saw Greenshoots of reviving Economy. For that reason, markets rallied 30-40% off from the March 6 low. We now continue to anticipate a correction period going into the Mid year CIT. However, we haven't seen stronger selling momentum yet as technical reading is not severely damaged; therefore, it is better to be cautious during the next week.
Markets are entering into a pivotal week for a sell-signal confirmation even though we now have a correction signal after the OE week. * QQQQ 33.37 after trading to QQQQ 33.23 within the range which I noted and noted consolidating trading session.* SPX 882.88 after trading to SPX 878.94 traded below the 881 S.* DOW 8268.64 after trading to 8230.17 - the lower price channel S.* Nasdaq 1680.14 after trading to 1676.56 - the 60min, 200ma support.SP500: 900 ~ 880 /850/800/750
DOW: 8420 ~ 8250 / 8000Nasdaq: 1710 ~ 1660/1620
QQQQ: 33.70 ~ 33/32.50/31.50/30.70

SPX 15min
After the 3-4% correction during the OE week, would the vst downtrend continue during the next week?

* Even though 60min SPX chart is showing a moderate positive divergence, daily price action is continuing to show negative divergences which I previously noted.* We now see a vst downtrend and could see a continuation of the downtrend during the next week.* A violation of the vst downtrend as shown on to 15min SPX chart, SPX 900 +/- remains as a resistance.

As anticipated, markets have shown a moderate profit taking OE week and finished off the week at SPX 882.88. We have seen about a net 3-4% correction of the recent 30-40% rally.* We are seeing progressive correction going into the Mid-year CIT. While we still have DOW and SPX have not broken below the uptrend line supports, Qs and other major indexes are clearly trading below the recent uptrend line. Considering other technical reading factors as previously stated, our anticipation for a correction is now becoming realization. As noted on earlier commentaries, SPX 750 -800 target is the best case scenario correction targets. ** This correction is just started, with a continuation of market correction, hence, it is better to take profit than thinking that we are going to right back up. Considering other technical factors, markets are still very overbought* Markets already rallied 30-40% during March 6 - May 9, 2009.
* Many stocks are already rallied 100-200%.
* Markets are very overbought!


Other Market Updates
* Cnbc weekly analysis
* MSN money market summary


* So far, we are seeing progressive correction going into the Mid-year CIT. While we still have DOW and SPX have not broken below the uptrend line supports, Qs and other major indexes are clearly trading below the recent uptrend line.
* Even though 60min charts are showing a moderate positive divergence, daily price action is continuing to show negative divergences which I previously noted.* After the light correction during the OE week, markets finished the week near at scondary supports, therefore, this week will be another pivotal week with the FOMC min release. * Markets priced in stabilization of markets and a moderate rebound during the second half of the year.* This correction is just started, with a continuation of market correction, hence, it is better to take profit than thinking that we are going to right back up. Considering other technical factors, markets are still very overbought* As noted on earlier commentaries, SPX 750 -800 target is the best case scenario correction targets. >> Continued