Sunday

MAgik - 3(March) x 9(th) = 27

Post a Comment March 8, 2009 – 9:38 pm |   | Permalink |  Print This Post |

MAGIK Numbers

Daily and Weekly Dow Jones | FTSE Analysis

By Mr. Magik

9 Mar 2009 | Edition 27

The markets have taken a beating in the past week. We are at 12 year lows for the Dow and S&P, key support levels on the SPX (S&P) have been broken. Many minor rallies have fizzled out to new lows. This is a daunting time for any bull, including Magik. This is indeed turning out to be catching a falling knife as we head lower, do we buy now? Can we even anchor small positions on the way down? Nobody can tell you the answer but we can only rely on our technical indicators and historical bear markets rallies research. We still think a bounce is way overdue, ie. a rebound of circa 50% from the recent high of 8500 where this recent crash started. We see a high of 7250 -7400 for any rebound in the next week to be the highest we expect to attain. Our plan is to anchor and catch the falling knife hopefully it is blunt and then reverse short at circa 7400-7500. We believe now that the markets will be heading lower into the summer after this bounce. The saying buying in March sell in Easter may hold some truth.

Dow

The Dow closed at 6625 on Friday. We are expecting a rebound today and for the week to end positive, but would not expect the bounce to be extremely powerful, target is 7250.

We are expecting the Dow to trade within a range of 6767 (daily R1) and 6480 (daily S1). Swing is neutral at 51%; futures after the market closed on Friday was positive on Dow and was up 0.6%. We expect the Dow to trade within the range. Support at 6340 and 6380 is strong support for week.

Trade plan

Buy at 6480 target 6767 stop is 6360.

FTSE

The FTSE index closed at 3531, in a neutral position. The expected trade range is between 3585 (R1) and 3483 (S1). FTSE has taken a beating but relatively has been fairly buoyant due to the weakness in the Sterling; for some funds which are valued in USD, the FTSE is relatively cheap compared to the Dow.

Trade plan

Buy 3483 target is 3585 or 3730 (weekly), stop is 3400.

Best to your trade,

Mr.Magik