Today the [tag]stock market[/tag] provided impressive [tag]gains[/tag], which marked the status as “Rally Attempt”. It seems like the market has found its bottom. It could be a short live attempt however, and it still may fail. Recently the market hasn’t responded to bad news with further drops and it tried to rally three times in a short period row. It seems that the bull is eager to ride up and bring the end of this [tag]bear market[/tag]. It is said that the market has a predictive potential that it can predict improvement of the [tag]economy[/tag] (or worsening on the other hand) about six months ahead. Economists and market commentators speak about improvement during the first half of 2009 or at the half of the 2009. This rally may be the prediction of it.
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In newspapers or in the internet articles you can read [tag]market[/tag] commentaries which may sometimes look very optimistic and another day very pessimistic. Usually these commentaries are dedicated to that particular [tag]trading[/tag] day. For example when you look at Market Dispatches 12/2/2008 you may get fooled that the market has finally recovered and is in a rally. The post reads:

[tag]Dow up 270[/tag] despite darkening auto picture

The [tag]rally[/tag] comes as financial stocks and General Electric move higher. GM says it needs $4 billion to get through 2008; its November sales fell 41% from a year ago. November sales for Ford, Toyota and Honda fell at least 30%.

Even the results of today’s trading were impressive, these results are based on weak data and rumors. It is frustrating watching the market and [tag]stocks[/tag] everyday, but it is very important to stay out of these daily up and down moves and watch the market as a whole picture. When we take a look at the [tag]intraday trend[/tag] the picture looks completely different:

As you can see, the market was choppy and most likely driven by rumors. Such a rally is weak and unsustainable. When looking at daily chart, the result is even more mediocre:

The trend goes nowhere with a high probability of further drop. When watching all euphoric data about rallying as well as declining market, always take a look at the whole picture.

Tip: This market is not the one you want to be [tag]invest[/tag]ed in, unless you can use a day-trading technique. The market is usually very volatile during the side-way period and most stocks tend to follow it. There is still nothing to do than waiting. Use this time for studying the market and stocks, save money, do not open any new positions, create [tag]emergency account[/tag] if you still do not have it, build a [tag]watch list[/tag] and wait for the market to tell you when it is the best time to start [tag]buying stocks[/tag] again.

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“…[tag]Ford[/tag] (F) described Tuesday’s request for a $9 [tag]billion[/tag] government [tag]loan[/tag]. [tag]General Motors[/tag] (GM) wants $12 billion in loans and a $6 billion [tag]credit line[/tag]. [tag]Chrysler[/tag] is requesting a $7 billion loan.” (cited from today’s IBD Featured story). Altogether they require $29 billion of a loan (credit line is excluded).

I would be cheaper. I want just one [tag]million[/tag] of dollars and I will be truly happy. When the automakers made billions of dollars, did they give you something whenever you just “wanted”? I don’t think so. I believed that we have capitalism in the USA, now it seems we are going toward socialism or communism. In those systems governments were also bailing out and keeping inefficient and bankrupting companies artificially alive by pumping inflationary money into their budgets. Any time a big company will act irresponsibly (banks) or will become inefficient and outdated (i.e. automakers) we (taxpayers) will bail them out. They don’t even have to work hard on improving, finding new solutions, innovative, efficient, and green products. Why, we all will pay for it. Gosh, I have seen this already somewhere…

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A bear is still raging in the [tag]market[/tag]. Today’s drop ended the [tag]rally attempt[/tag]. I was thinking to keep the market status as it is, but the drop was too big.

The market is probably entering its side way trend. The only positive thing on this would be that it won’t go further down (well, it still can go lower, if my assumption is wrong).

Tip: This market is not the one you want to be [tag]invest[/tag]ed, unless you can use a day-trading technique. The market is usually very volatile during the side-way period and most stocks tend to follow it. There is still nothing to do than waiting. Use this time for studying the market and stocks, save money, do not open any new positions, create [tag]emergency account[/tag] if you still do not have it, build a [tag]watch list[/tag] and wait for the market to tell you when it is the best time to start [tag]buying stocks[/tag] again.

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