As we look at the market we are retesting the lows of 7,500. This is a big number as it constitutes as the support level for the DJIA. We also have support levels of 770-775 on the S&P 500. We seem to be going in and out of that support level. However, if any more news (or bad news) comes out look to break these levels with GREAT volume and we should then find support around 7,200. We are on high alert and treading water in the deep end. One move and we will sink.
Reference: My pick of SKF, which is the ultrashort for financials has increased 25%!
Should Obama, Geithner, and Bernake continue to speak to the American public anymore? While they might come off as sincere and understanding, anything they say has a downward affect on the market! I watched yesterday as the DJIA was up 30 points and by the time Obama finished talking we were in the RED. I think the overall sentiment here is that we have extremely bearish news out here. We are looking to rally if we can just have some sort of positive news, or no bad news for that matter.
I would continue to hold onto cash but to cherry pick the good companies and buying at low levels. I believe that buying some strong financials like Goldman Sachs and JP Morgan at these levels are good buys. Look for JP Morgan to go under $20. Remember greater risk with greater reward. I believe JP Morgan will be the one commercial bank to come out of this mess the winner.
I will follow up this post with insight into the Real Estate market
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