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Friday, October 10, 2008 

There will be tough economic times ahead

I wish I could share some optimism to all of you, but looks like the worst might be in front of us. There are no clear indications of the gravity of the entire complexity of the crisis; no one has sufficient courage to inform the market, which are the real numbers behind the collapse of the subprime. Yesterday, the US treasury secretary warned that more banks will fail despite the $700bn rescue package to shore up the financial system, telling also that the financial crisis would not end soon. In addition and in the same day, the IMF's chief economist, Oliveri Blanchard, said the orchestrated rate-cuts could not solve the world's financial crisis on their own but were clearly a step in the right direction. What this mean for us? Difficult times ahead. My crystal ball is not happy these days neither forecast that the current fall in the stock market will end soon. The only conviction that I have after this comment is the clear certainty that the coming year will be bad. It will be very rough. A lot of bad things will happen again with a lot of layoffs and an international turmoil. From now on, playing in this market will be tough, where any stop loss must be well introduced to avoid the high levels of volatile. No one is more confident about the financial institutions; the losses exceeded the reality for many people. The responsible for these bankruptcies are now enjoying the sun and the beach somewhere in the world, while most of the shareholders are crying in the streets with their pockets completely empty. What democracy is this ? Why there is no law to punish these guys ? The economy is near collapse thanks to those vultures.

Chart courtesy of stockcharts ( click to enlarge )

MSFT trend remains bearish. The daily technical indicators remained bearish at Thursday’s close and showed the main trend of the stock was still negative. The stock is still in very weak market as 50 day moving average is still declining and MACD is still below 0. In addition KD also show weak signal, K line is dropping below D line.

Chart courtesy of stockcharts ( click to enlarge )

Shares of Yahoo dropped to a new 52-week low in final trading Thursday. Shares ended the day down $1.11, or 8 percent, to close at $12.65 on heavy trading. 40 million shares were traded, the average daily volume is 20 million shares. Technically, the stock is in a Bearish mode with MACD below signal line and the price below both 50 and 200 day moving averages. Analysis of the stochastic shows the bearish trend would persist. So right now, I would like to stay away from this stock.

Disclaimer : Trading stocks involves risk, this information should not be viewed as trading recommendations.The charts provided here are not meant for investment purposes and only serve as technical examples.

That's All. See you later !!!

AC

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  • I'm a 43 year old Independent Trader using proprietary technical analysis with more than 18 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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