Dow Jones Industrial Down More than 200 points

Posted by btr Fri, 22 Jan 2010 01:48:01 GMT

As expected in the last post, it reached the resistance level and came down in a big way.

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INDU Pullback?

Posted by btr Tue, 08 Sep 2009 01:05:41 GMT

Dow Jones Industrials has completed another leg of up trend building since last pullback to 8100.

Current resistance at 9600 has not been broken. A pullback to 8800 is likely if it fails to break out 9600.

However, if 9600 is taken out, the next resistance is 10,750!

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Short Term Bond Fund VFSTX

Posted by btr Tue, 08 Sep 2009 00:19:00 GMT

Here we took a look at one of Vanguard Bond Funds: VFSTX. Yield 4.41%; YTD return 10%; investment grade corporate bonds; average maturity 2.6 yr.

It suffered a 10% drop in price in 2008. The actual return was -5%, which was big in short term investment grade bond fund.

What was the cause of that big drop? Client redemption? Maybe considering credit crisis occurred last year. A few bond holdings went under? Maybe too. Had it owned Lehman Brother, for example.

It’s quite interesting that it has a unusual V-shape recovery after the drop. Obviously the relative higher yield has been attracting a lot of investors looking for better returns on their short term investment. Has it also attracted a lot of people who are basically using it as money market funds? Maybe.

Another reason for the recovery might be the valuation of its certain holdings has recovered since the credit crisis.

For comparison, here’s Fidelity FBNDX chart, which showed similar drop last year.

If you have owned similar fund, you probably want to pay closer attention to its price movement.

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Dow Jones Industrials Retreated

Posted by btr Thu, 14 May 2009 01:46:00 GMT

It’s down more than 180 points. If the current uptrend line is broken, the first support is at 8000-8100 level, which could become a good base to build some long positions if the worst is over. Let’s watch closely as overall it’s oversold at this point. The V shape bounce needs some time to consolidate even we’re entering a new uptrend.

The next support is 7500, which is previous low before this last leg down.

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Dow Jones Back in 8100 level

Posted by btr Fri, 01 May 2009 01:52:07 GMT

Dow Jones Industrial has climbed back over 8100 level.

It has approached the downtrend line very closely. Although there’s a chance for it to break the downtrend line, but before it happens, I’d rather to sell into this strength to build more cash position.

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Dow Jones Broke Down

Posted by btr Tue, 24 Feb 2009 05:13:00 GMT

Dow Jones Industrial has broken its major support around 8000. There’s no clear support but some round number at 7000 or 6000. 5600 is a support.

Where will the market go from here? Not sure but we can try to read the market and right now it’s going south.

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The big board retesting 8,000 level

Posted by btr Fri, 16 Jan 2009 01:35:00 GMT

INDU is retesting the 8,000 level again. As we can see, it’s currently over sold and the volume is slightly above average. As we have said before, around 8,000 is the major support level. For a short-term trade, it’s time to buy some.

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Is the worst over yet?

Posted by btr Sun, 21 Dec 2008 01:05:00 GMT

Dow Jones Industrial Average has been up and down for the past many weeks but it appears that it has moved towards sideways. As recession has been officially announced and confirmed, how much has the market priced in all the bad news?

Certainly investors are looking for values after significant drops, but it’s not clear that if it will range bound between somewhere below 8000 and somewhere above 9000.

If it builds a long base above 8000 and consolidates the base, we may see more upside but we need to see the confirmation.

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Dow Jones Industrial Average Is Walking Out Its Downtrend

Posted by btr Fri, 31 Oct 2008 23:54:00 GMT

It closed up today and the week so it’s following through the big shoot up the other day. As we can see that on the daily chart, it’s in short-term over bought condition now. It’s slowly walking out the downtrend line, but we should be cautious as the volume was not confirming.

If you have significant equity positions in your portfolio, any rally into 9,500-10,000 zone can be your opportunity to lighten up and preserve your capital during this bear market.

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Market Rockets Back

Posted by btr Tue, 28 Oct 2008 23:17:00 GMT

All major markets rocket back over 10% today. A lot of short squeezes probably. I don’t believe that there’re so many longs that couldn’t wait and jump on the buying spree.

On the monthly chart of Dow Jones Industrial Average (INDU), you can see that we’re approaching previous low, which occured 5 years ago. Have we reached the bottom yet? Not sure, but we might be near the bottom judging by the previous low, which is the current support level.

The looming global recession is on everyone’s mind, so it’s possible that the support may not hold. There will be many ups and downs around that support. We can certainly play longs at the support level and shorts at any rally near 9,500/10,000 zone. The markets are currently in oversold condition and volatility will remain high as seen in the past a few weeks.

On the 3-month daily chart, INDU is moving away from the oversold condition. If we don’t see a follow through on this snap back, the downward trend will continue. 8,000 looks like a good support for now and the more fight between the bears and bulls around 8,000 the stronger it will become. If the downtrend continues, 7,500 is the next major support to watch.

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