Wednesday, November 07, 2007

Stock Market Comparative Analysis

Stocks got hit today across the board with many indices breaking some key levels. Whenever I see a market sell off within an overall long term uptrend, my view is that this could be a buying opportunity.

In the above chart are the three major indices ...the NASDAQ, Dow and the S&P. As you can see all three indices moved sharply lower today. If you look closely at the above chart, you will notice that the NASDAQ has been much stronger than the S&P and the Dow. For example, the NASDAQ is still above the July high while the Dow and S&P are clearly below their July high. Even on a shorter term basis the NASDAQ is stronger than the other two indices. The NASDAQ is above last month's low while the S&P and Dow are below last month's low. So in my opinion, the NASDAQ is where money "HAS" been moving into over the past few months.

What I'm looking to do is possibly buy NASDAQ stocks on this dip in the coming days or weeks if I see the NASDAQ show signs of strength. Yes, I'm aware that the Q's are down about .65 in after hours trading. I have no intention of buying anything tomorrow or the day after. I'm going to be patient and let this correction play itself out. What I'm looking to do is just make a list of indices and stocks that have been showing strength, and when I feel the time is right I will know exactly what to buy. In other words, I will be prepared!


Mike said...

Kevin, Great comments about the indices. Thank you

V said...

Hi Kevin,

Can you share the list of stocks that you are targeting? What's your view on GOOG, AAPL, JNPR, NT, ERTS, MSTR, MKL.


hkc_00 said...

I would appreciate greatly if you'd let us know when you make your move. Thanks for the great analysis, as always.

hkc_00 said...


I left a similar comment in your old post, but don't how whether you'd get it. Would next week be considered 2nd wk of Nov in your bullish chart for 2nd wk? Thanks.

Romeo Bravo said...


let me answer that one for you. The second week is considered the 2nd Monday of the month. Also, the Dow (DIA) MUST be above its 10 week (50 day) moving average or DO NOT take the trade!


Kevin said...

Well said Romeo....well said....

HKC, if I do any buying, I'll post it on this blog the very same day I make my purchases. I'm just going to be patient right now and let this correction play itself out...If at some point it looks to me like the market is heading back up, I will look at my list of strong stocks/indices and if they still appear to be strong, I will most likely buy them...I'll keep you posted.

hkc_00 said...

Thank you very much.

cheesefries said...

Thanks Kevin!

chiu said...


You have mentioned that 70 week moving average has served well for the past 3 years.

It seems to me that 89 weeks moving average is better, specially on the 16 Aug 07 intraday low.

What is your comment on this ?


Banker said...

Stops are really looking poor. With slower growth on the horizen (in my opinion) I am looking for a grind lower in stocks. Tecnicals are ok, but fundamentals are what drives a market (at least in my opinion.)

clarence said...

Kevin: Comparative analysis between $indu & $tran leads one to ponder dow theroy. We now have a non-conformation, if we hit a new low (Aug 16) on the dow you may want to wait, thats bearish. Oil will continue its advance, pushing $tran lower. Oil $200.00 per barrel is cost adjusted = 39.50 in 1980. Truckers will cry foul, and the wheels will come off the economy. Your thoughts. Clarence

Jesse said...

Hi Kevin,

I am wondering if after today's big move down in the precious metals if you think we are nearing a buying opportunity. I know you have been out of the metals but I have been anxiously awaiting your analysis of the sector since your return. As always, thanks and appreciate your efforts.

Jesse Team said...

Indian stock market

Hi Everyone.

Your blog is nice and informative. We think your visitors will like this posting.

We all know that Indian stock market has become volatile now a days. One day its going up and another day its coming down. So we all should like to know
what is the reason for it. As in the last post we have mentioned that FII are the main reason, but now to there are few more factors adding to worries, they are:-

1. FII profit booking.

2. Political issue - Indo-US nuclear issue.

3. 25 Basis cut which was expected by US people of atleast 50 basis.

4. Low volumes due to holidays in coming week.

We suggest you to take bit long positions right now as market is volatile so don’t prefer intraday trading for few days.
All scripts are currently trading at low price hold them for 10-15 days so gain maximum.





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