February 6, 2008

The day looked as if we were going to get one of those reflex bounces and recover some of the losses from the previous two sessions. However, investors were just too nervous to commit any extra of their capital to sustain this rally, and as a result, a perfect opportunity was formed for the bears to step in and erase the day’s gains. While we got a few good earnings reports (Disney in particular), later in the afternoon, a hawkish statement from a Fed governor helped flame the fires that had already begun to take hold of the market.

The markets are poised to test the lows from January, and the action at those prices levels will be something worth watching. Your traders and investors alike, will all be watching very carefully to see whether or not the bulls can step in and turn things around at the lows, or if the bears will ignore the bull’s efforts and just shoot right through the support level. Usually, a market needs to see some major panic-selling to shake the weak hands out of the market; we could have gotten that last month, but the Fed prevented as much from happening by issuing an emergency rate cut. As a result, the bleeding was stopped for the time being. However, less than a month later, the issues are the same, and the euphoria of hope created by the Fed has worn off, and we are ever so nearing the lows from last month.

Cisco (CSCO) issued a less than stellar earnings report, and we are likely to continue the trend from the past three sessions again tomorrow, unless a surprise earnings report comes about, or a surprise news story comes about. If not, expect the downward trend to continue into tomorrow.

Let’s review the charts…

NASDAQ was the big loser on the day, decreasing about 1.3% overall – about double the rest of the indices. With Cisco’s negative earnings report, and the significant intraday reversal, we should expect further downward momentum until we at least test the January lows.


The S&P fared much better, but it too was unable to hold its positive gains on the day, quickly reversing in the afternoon. The S&P has held up much better than the NASDAQ, but we believe that we are on track to test the lows from last month also.


We are currently working on adding a new feature to the website called the “Shareplanner Stock Screener”. We believe that this feature will give our readers more tools at their disposal and ideas for various types of stocks to trade and invest in regardless of the market conditions. Stay Tuned!