Thursday, November 29, 2007

Ms Dow & Mr Jones having sparkling wine.

The host that toasted Ms Dow & Mr Jones on Wednesday to a spectacular fanfare of sparkling wine was none other than Federal Reserve Vice Chairman Donald Kohn.
Kohn, 65, was director of the Fed's Monetary Affairs Division and special adviser on monetary policy under former chairman Alan Greenspan.
He ignited the candlelight and soon the Dow Jones Industrial Average enlighten the whole trading floor at wall-street to a horrific performance.
Ha..Ha..Ha....Whaaat?
*market ``turbulence'' I personally anticipated it!
``We are going to have to take a look at'' the stress in credit markets ``when we meet in a couple of weeks,'' he said.
Kohn ``has just given the markets the green light for a rate cut on Dec. 11,''
``We need to take account of those market expectations, but not follow them blindly,'' Kohn said in response to a question.
Kohn also indicated that the continued deterioration in housing markets, now the worst recession in 16 years, have surprised him.
``It would be nice to see some early signs that it was beginning to stabilize, and we haven't seen that yet.'' ``There's further to go'' in revealing losses.
The more information that is made public about potential losses ``the better,'' as it will help ease uncertainty.
He added that a ``broader repricing of risk'' that increases the cost of credit and discourages spending ``would require offsetting policy actions, other things being equal.''
The short-term funding markets for banks remain under stress.
Kohn also said "we should not hold the economy hostage to teach a small segment of the population a lesson.""However, in my view, when the decisions do go poorly, innocent bystanders should not have to bear the cost,"
Kohn reinforced markets' belief that the Fed will cut rates at its Dec. 11 meeting.
Tracking the Dow on Wednesday 28/11/07
A second day of partying at Wall Street,but look out..!there's a big hammer 30 minutes towards the closing bell.The party is ending.."a graveyard doji" at the closing.The leftovers and trash are goin' to be buried.
After four days of consolidation,the Dow spike up surprisingly otherewise which it will still be held at ransom.Its sustainability is in question as the surge is base on "HOPE" and not adhering to market fundamentals.External forces will still influence the market.

Wednesday, November 28, 2007

Citigroup-from Oasis into Desert.


The financial giant Citigroup(C) has now been enGulfed by The Abu Dhabi Investment Authority (ADIA)for $7.5 bn.The Gulf Arab countries are running up current account surpluses of around $200 billion a year and have to put their money somewhere. ADIA, which is the world's largest sovereign wealth fund, has an estimated $875 billion in assets, according to brokerage Morgan Stanley (MS).
ADIA is investing up to $7.5 billion equity units, which will be mandatorily convertible into common stock between Mar. 15, 2010 and Sept. 15, 2012. ADIA could thus gain as much as 4.9% of Citi, surpassing the 3.6% stake held by Saudi Prince Al Waleed bin Talal, currently Citi's largest shareholder.
This isn't the first time Citi has turned to the Gulf for help. In 1991 the bank tapped Al Waleed of Saudi Arabia for capital. The prince remains Citi's largest shareholder, with 3.6%. He has been a demanding owner, willing to publicly blast Citi chief executives when it suited him.
An ADIA-related institution, al Mubadala, recently bought 7.5% of Carlyle Group, the big private equity outfit, for $1.35 billion and took an 8.1% share of chipmaker Advanced Micro Devices (AMD) for $600 million.
Dubai International Capital, which is owned by the ruler of Dubai, has bought stakes in both HSBC (HBC) and hedge fund manager Och-Ziff (OZM). DIIC also said on Nov. 26 that it had taken a significant stake in Japanese electronics maker Sony (SNE).
Citigroup CEO Downfall-just who spark it?
Former Citigroup Chief Executive Chuck Prince. The CIBC World Markets (CM) stock analyst was a leading agitator for the ouster of the embattled leader of the $200 billion bank. Meredith Whitney's report downgraded the stock to market underperform, the equivalent of a "sell." coincide with the Fed's Oct. 31 meeting, which warned of slowing economic growth.
The report hit the stock market with the force of a freight train slamming into a brick wall. Citi shares fell 7% Nov. 1, as analysts at Morgan Stanley (MS) and Credit Suisse (CS) followed with their own downgrades. The broader market also dropped on the news, with the Standard & Poor's 500-stock index falling nearly 2.5%. Citi's board called an emergency meeting for the following weekend, and CEO Prince stepped down three days later, on Nov. 4. (November interview)
Whitney's clients include major hedge funds, such as billionaire Steve Cohen's SAC Capital Partners, Fontana Capital, and Denver Investment Advisors.

But Whitney has made a career of such calls. She has issued sell ratings on stocks such as Enron, Providian, CIT (CIT) and Capital One (COF), which she downgraded twice during 2006.
Whitney received several death threats after the Oct. 31 report. She takes such threats in stride, saying "sometimes it's good to know that you are striking a nerve." Layfield, a private investment banker and author of Have More Money Now, says the people who threatened his wife were cowardly. He canceled a trip to Texas so he could see to her safety.

Pride Goeth Before a Fall
Whitney
says she is fascinated by the way power is used and misused on Wall Street, adding that so many of the problems in the corporate world—from Enron to Citi—flow from ego. "So much of this is a human story. Hubris is the cause of management mistakes 90% of the time," she says.
But so far, in the words of one senior investment banker, "the market is betting on her being right."
(source:Bizweek Rosenbush )
Tracking the Dow on Tuesday 27/11/07
The bulls came in full force on a rampage steering all the way through the oasis and having a slight pause at the desert between 2:30pm-3.30pm.Now they are having camels as their new companion.It's a new beginning.Towards the close was a Homing Pigeon flying in to join the masses.
It's going to be an early Yuletide!!!Santa Clause is coming to town.Yo..hho..hho!!
The new candlestick that light up your life.




Monday, November 26, 2007

Dow Index under sell-down again!

Another series of announcements that pointed to continuing problems in the credit markets, the result of home loan debt going bad under the weight of a faltering housing market seems to haunt the financial market.

1) Citigroup Inc. warned it is looking to cut costs -- raising the possibility of further job cuts.

2) HSBC Holdings PLC said it plans to bail out two funds it manages.

3) The New York Federal Reserve, acknowledging "heightened pressures" in money markets that are expected to last through the rest of the year.

4)Financial companies fell after Goldman Sachs Group Inc. said HSBC Holdings Plc (HBC:US) faces $12 billion in additional writedowns for subprime defaults.

5)The reduced 2008 growth outlook stemmed from ``tightened terms and reduced availability of subprime and jumbo mortgages, weaker-than-expected housing data, and rising oil prices,'' the Fed said in its Summary of Economic Projections.

6)Calls for more transparency at Citigroup Inc.Citi has committed $10 billion in liquidity to the seven structured investment vehicles it manages on an "arm's length" basis, and has kept them off its balance sheet -- meaning Citi has not been counting the SIVs' debt as its own.


Tracking the Dow on Monday 26/11/07
The overnight bullish spillover lasted for half an hour before it got crushed further.There were intermittent bargain hunting with many distinct Doji Stars formation---a sign of indecision.The Dow seems to be held at ransom by some financial juggernauts dictating their terms based on news of fear.Towards the closing bell,the grizzly bears growled ferociously at the bulls ending near the day's low.The candlestick at the close is a Dragonfly Doji and pairing both together,it's known as Hammer .Hammering-out a bottom downtrend.A rebound is in place.

Looks like an alternate game of play.So will Tuesday be a bull-play for short-covering.The Fed said it will provide more than the usual year-end liquidity and that it is lifting the limits on how much can be lent to any one bank.Will this lift-up the stocks again?
The Fed said it would offer on November 28 about $8 billion through a repurchase agreement due to mature on January 10, 2008, and that it would conduct more term repurchase agreements extending into the new year.
A term repurchase agreement is a Fed loan to banks of more than one trading day

Sunday, November 25, 2007

Shanghai Stocks Ragging.

Finally after nearly over one-week of agonising non-stop hammering on the Shanghai Stock Exchange,the chinese investors and speculators have a sigh of relief on Friday when the market close at 5,032.13 UP 47.969 points.The low was 4,896.988.

This is the first time ever that the stock market punters have experienced how a crash will taste like as most have never gone through the boom and the burst.

The euphoria of chasing up stocks without realising the intrinsic valuation,warning by corporate officials and herd instinct have been a bitter lesson to a large section of the investors.

Anyway the hammering has been completed.Most of the financial market,technically have been corrected right up to the pivot point,some held at the bullish and bearish pivot point and Nikkei has wiped-off its one-year chart.The Dow has also completed its dressing right to the Moving Average Line (Main Pivot) where the left shoulder and the head has been formed.It needs to complete the other right-shoulder (see my previous chart) otherwise it will be like a one-arm bandit ready to skin everyone again.Let's hope Good Oldman don't Sucks.
Tracking Shanghai Lol.
The correction has been completed near the bull pivot.The Great Wall of China will be rebuilt.The tyrant Emperor Qin Shi Huang of the Qin Dynasty is back.This time he might be building his famous Terra-Cotta Warriors and Horses.
Meantime investors should get some prescription from China Nepstar Chain DrugStore Ltd (NPD)
http://finance.yahoo.com/q?s=NPD

Wednesday, November 21, 2007

Market Trumpeters.

China's world-beating rally may be a ``bubble'' ready to burst, say the former U.S. Federal Reserve chairman
Asked if China was in a state of ``irrational exuberance,'' Greenspan told a conference of insurance executives in Boston on Oct. 30: ``I think so.''
``When you don't expect it, it breaks,'' Greenspan said,

Billionaire Buffett, chairman of Berkshire Hathaway Inc., last month urged investors to be ``cautious.''
Buffett, who said on Oct. 24 that ``it's easy to be carried away in the stock market when things are going well.''
http://news.bbc.co.uk/1/hi/business/1217716.stm

Hutchison Whampoa Ltd. Chairman Li-Ka Shing,Asia's richest man said in May that the Chinese stock market ``must be a bubble.''
The CSI 300 trades at about 39 times estimated earnings, compared with about six times for the MSCI Asia Pacific Index, which tracks more than 1,000 companies in the region. China's CSI 300 index has surged 148 percent this year, the world's best return. The benchmark tracks the 300 biggest companies on the yuan-denominated A-share markets in Shanghai and Shenzhen.Domestic investors opened about 33 million accounts for trading stocks and mutual funds in the first eight months of this year, six times the number opened in all of 2006, according to China Securities Depository and Clearing Corp.
Chinese Premier Wen Jiabao is warning that China needs to prevent an asset bubble from forming in its stock market, a government news agency reported Tuesday. full story




HenryPaulson, 61, has tried to be reassuring. ``I view the housing and mortgage market decline as the most significant current risk to our economy,'' he told reporters in Washington on Oct. 31. ``Even so, we have a healthy, diversified economy that will continue to grow.''
When the markets began to shudder in July, Paulson used the address book he had built up during 32 years at Goldman Sachs(he was then chief executive officer) to seek information and advice from Wall Street's elite.He took office as US Treasury Secretary in July 2006


Tracking the Dow on Wednesday.
The psychological support of 13,000 has been breached.Let's hope that it's a pre-holiday adjustment.


The Pivot support line has been penetrated.Will the market -traders pause at this point to prepare for the right-shoulder formation before the next real meltdown?Only after Thanksgiving Day will know.

US slowdown has begun!

Fed officials said growth would slow to a range of 1.8% to 2.5% next year, down from growth around 2.45% in 2007. Some Fed officials were more pessimistic, putting growth down as low as 1.6% next year.

Real estate--- the damage has been done with more delinquencies and foreclosures,

The Fed alone will not be able to prevent this crisis is that its main jurisdiction is over the banks -- and the problem is now centered in the financial markets. This is because the banks no longer have these loans on their books, having turned them into securities and sold them to others.

In turn, these mortgage-backed securities were used as collateral for the issuance of debt, whose value is far lower than originally thought.
This has caused massive write downs by holders of these securities, cutting into their profits -- but, more important, depleting confidence in the financial system. And this reduction in confidence is spreading beyond the financial markets and residential real estate to commercial real estate as well.

The bankers are now holding securities whereby their capital is being reduced and thus their ability to make new loans is limited.So the unavailability of funding for business expansion on new plants and equipment will add to a slow down of activity.This is overwhelming the positive effect that the lower-valued dollar is having on the exports,a good balance.

Seventeen reasons America actually needs a recession by Paul B. Farrell,
Tracking the Dow on Tuesday 20/11/07
The Dow opens near overnight level and creeps up till 10:45am and starts sliding after the Fed's reading of October FOMC minutes."It's a slowdown"Towards the 45minutes near closing,the fake bulls make a last minute dash to set a trap.The shooting star followed by a bullish hammer is the signal.At closing was a four-legged doji---which means the frog can leapt up or down at a tremendous speed.

"Humpty-dumpty had a great fall."That spinning white doji at the bottom shows a chance of a rebound.The maket-makers have a chance of playing at the bottom tail if it has a bearish view right up to 12,830 level and vice versa.

Monday, November 19, 2007

Goldman Sachs score hattrick

Instead of corporate earnings report,economic calenders,Fed officials or government speeches-that can have tremendous impact on the financial market,Monday seems to have a different financial theme player---the Good Oldman Sucks.
It need only four financial analyst of the company namely Lori Appelbaum, Thomas Cholnoky, James Fotheringham and William Tanona to write in a lengthy gloomy report released on Monday about falling house prices and a worsening economy that will drive down securities based on residential mortgages, especially those given to borrowers with the riskiest credit.Write-downs will mount and some mortgage insurers and guarantors will be forced to raise capital just to survive.

Meanwhile, the value of collateralized debt obligations -- bonds based on pools mortgages -- related to those subprime mortgages, could fall another $150 billion across the industry, the bank said.This reignited fears that losses from the global credit crisis may widen.

With home prices, consumer credit deterioration is not far off. The downturn in housing is spilling over into employment in some states and is leading to high consumer losses, the analysts said.
Falling home prices have put one-third of the United States, by Gross Domestic Product, in or near recession, the analysts wrote. California is the biggest concern as it represents 13 percent of the U.S. GDP. Card and auto losses will rise.

Although financial companies across the board have seen their stock prices walloped, despite attractive valuations, Goldman says a broad wave of industry consolidation is still another 12 to 18 months away.

"We believe acquisitions are unlikely to occur until balance sheets stabilize and a market bottom is in sight," the analysts said
Tracking the Dow on 19/11/07.
The opening Gap-Down only 0.49 points and slide in the first minute giving every investors no time to react.
Breaking the 13,000 mark psychological barrier is quite alarming.Is the US recession going to start after Thanksgiving Day or has it started?The intraday pattern has the sight of an inverted head & shoulder but the right shoulder is still half paralyse.It must form by tonight otherwise which the market will collapse further like the US dollar.
The global financial flushing started on Tuesday 13th from the west and travelled to European Union on 14th,South Asia--=India on 16th and the last leg of tour Asia Pacific on 19th completing the Long white bullish candlestick.Just in time for the Fed's minutes of October Meeting to be held tonight.See how good Mr Good Oldman can plan all these tactical move.He must be a 'finacial dictator.'

Jiangsu Hengrui Medicine Co Ltd.-Cancer Drugs

Sanofi-Aventis (Full Company Profile) has once again taken Jiangsu Hengrui to court, this time to Beijing High People’s Court, for infringing on its patent for Docetaxel, which is marketed in the U.S. as Taxotere for cancer of the breast, ovaries and lungs.
Jiangsu Hengrui is one of the leading producers of cancer drugs in China. The two companies have been in various courts over Docetaxel for four years. This time, the dispute is over the patent covering the formulation of injected Docetaxel. Sanofi-Aventis is seeking 45 million RMB ($6 million) for IP infringement, 55 million RMB ($7.3 million) as compensation for economic loss, and 200,000 RMB ($26,600) for various fees.

Hengrui rejects the claim and says it will fight the charges. Docetaxel accounts for 20% of Hengrui’s revenues.

In 2003, Aventis filed a suit against Jiangsu Hengrui for infringing on its manufacturing patent. In September 2006, the Shanghai No. 2 Intermediate People’s Court ruled in favor of Sanofi-Aventis in that matter, and ordered Hengrui to pay RMB 230,000 ($30,000) to Sanofi-Aventis. However, Jiangsu Hengrui appealed to the Shanghai Higher People’s Court and won.

In June of 2007, that court ruled in favor of Hengrui, although it did state that the company had engaged in “unfair competition” with Sanofi-Aventis. It was ordered to pay a relatively small RMB 100,000 (US$13,106) in damages.
SNY 1-yr chart:

52weeks High:USD48.30 Low:USD37.90
EPS:2.16 Dividend:0.99 Yield:2.30
Market Capitalisation:119.84b
Exchange:NYE


Tracking Shanghai.
Today 19/11/07
Previous:5,316.274 Open:5,325.302
GAP-UP:9.028 High:5,333.088
Low:5,240.424 Closing:5,269.817
DOWN46.457(-0.87%)
The Shanghai chart is performing the same tango like the Dow---similar pattern.Today's closing was held safely in the bullish zone in its failed attempt to break the long bullish bar.Its formation of candlestick is like the one on Friday..Will it move southward to complete the wick(long tail of Wednesday candlestick) before it start rebounding again.Make sure it don't light up to form a new black bar.Looks choppy ahead.

Saturday, November 17, 2007

Federal Reserve to open up its secrecy

Federal Reserve Chairman Ben Bernanke moved to break down even further the aura of secrecy that historically has enshrouded the institution that sets interest rates, taking steps to keep Main Street and Wall Street more closely wired to decisions that can make or break lives and businesses
The time has come for the Fed to tell the country four times a year -- not twice -- what its projections are for the health of the economy. And when it gives that forecast, it will say what it thinks the business environment will be for the following three years -- not two.

These forecasts -- a kind of Fed report card to consumers and businesses -- will state the expected pace of economic growth, the anticipated unemployment rate and whatever policymakers can divine about inflation. However, the Fed also will say expressly -- and in unprecedented detail -- what the thinking of the policymakers was on a given issue and will furnish more details about whatever risks are in play.

Bernanke called the changes an "important advance" in the Fed's communications strategy.

The first expanded set of reconfigured projections will be released Tuesday at the same time the Fed turns loose to the public the minutes of the policymakers' October meeting

In 2008, the expanded projections will be published in the minutes released after the Fed's meeting on interest rates. The forecasts will be included in the minutes of the Fed meetings scheduled for January, April, June and October, Bernanke said. The projections will continue to be described in the Fed's twice a year economic report to Congress, he said.
Tracking the Dow On Friday 16/11/07
The market nearly got hammered again when Federal Reserve Gov. Randall Kroszner, who hinted that the central bank may not continue to lower interest rates, even if the economy worsens.Helping stocks higher was the energy sector, as crude prices climbed.
It's an erratic day again but since this is the last day of the Dow Index futures,the shorties have to rollover their final positions and buy up the market no matter how.The final 30 minutes of trading shows three powerful ascending soldiers with a small bullish candlestick close.The new index month will start with a brighter note.
On the economic front, industrial production suffered its biggest decline in nine months during the month of October, the Federal Reserve said Friday. The reading came in worse than expected.From the weekly chart,it can be inferred that the bulls are on hand as Friday spinning candlestick has set the stage for further rebound in weeks ahead.The 3 spinning candles are hovering within the long white bullish bar and Friday's position has penetrated the Main Pivot after completing the double bottom at the bearish Pivot.

Friday, November 16, 2007

Dow Futures Expiry.

Today is the 3rd Friday of the month and the Dow Index Futures expires.Traders will be actively executing their rollovers of contract to the forward month and this is the time of highest liqudity and stocks activity.Today is also the mid-month and also the Pivot Point.Traders who have short all the way down from high will be doing their short-covering so the market is poised to shoot up.

Concerns about consumer spending and the unfolding global credit crisis has driven some well-known stocks -- especially in the financial services sector -- to lows for the year. Bargain hunters were seen rushing into the market ahead of the weekend to take advantage of lower prices.

Concerns about the holiday shopping season sent Wall Street lower on Thursday.

Also weighing on investors was continued concern that turmoil in the credit markets will force more banks to writedown bad investments. There were also reports late Thursday that Residential Capital, the troubled mortgage lending arm of GMAC, was close to breaching bank loan covenants.

Oil prices rose amid expectations that global crude supplies will remain tight despite a U.S. oil inventory report that showed a surprising build in domestic crude stockpiles. Light, sweet crude rose 70 cents to $94.13 a barrel in electronic trading on the New York Mercantile Exchange.

There was little in the way of economic news expected Friday.

Tracking the Dow on Thursday 15/11/07
Yesterday's last minute closing candlestick was a shaven top & bottom with no shadows whatsover.Normally with this type of bullish new candle is bound to burn off entirely or partially.This is so as to what happens at the opening bell;10.00am;10.30am;12.07pm;1.45pm;3.15pm; & 3.30pm.as seen in the chart.Anyway the last minute candlestick at the closing bell was a pretty "Bullish inverted hammer" signifying that the bulls will be on hand the following day.http://www.litwick.com/indicators/1122.html


Due to the sudden powerful push on Tuesday,the two black crow descended back to level 1-2 so as to allow investors who have missed the boat to go onboard.
Friday & Monday pair of candlestick is known as the "Morning Star",that is the sun is rising.
http://www.litwick.com/indicators/1247.html
http://www.litwick.com/indicators/1130.html

Wednesday, November 14, 2007

Subprime mortgage crisis could hinder growth.

East Asian economies are likely to remain healthy next year despite the impact of the widening subprime lending crisis in the U.S. and the renewed increase in crude oil prices, the World Bank said Thursday. The region's rapid growth is also reducing poverty, although income inequality is expanding.

The bank warned, however, that the problems posed by the U.S. subprime mortgage crisis, the related credit crisis as well as rising oil prices could hinder East Asia's growth.
The report said among the economies, China is the largest overseas holder of U.S. mortgage-backed securities -- around $260 billion -- mostly through its international reserve holdings and through holdings of commercial banks. But most of these holdings are backed by U.S. government agencies such as Fannie Mae, the largest U.S. buyer and backer of home mortgages, the report said.

Rather, it said that impact of the crisis on East Asia has instead been heightened uncertainty and a reassessment of risk, reflected in stock market declines.
"Frequent and large reassessments of risk and high volatility in asset prices are likely to remain a part of the scene for some time," the bank said.

It predicted that a theoretical decline in U.S. growth to zero in 2008 -- a decline of 2 percentage points -- would be met with a 1 percentage point drop in median East Asian economic growth, to 5 percent from about 6 percent

"Significant, but no disaster," the report said, referring to the impact of a U.S. recession on the region.

The World Bank defines East Asia as comprising China, Indonesia, Japan, Malaysia, the Philipppines, Thailand, Vietnam, Hong Kong, South Korea, Singapore, Taiwan and some smaller economies such as Cambodia, Fiji, Lao and Timor-Leste.

Tracking the Dow on Wednesday 14/11/07

The overnight wild bulls were beaten by the bears in the last half hour of trading,a usual trading patternThere were many intermittent long black candlestick during the intraday session depicting the tired bulls.At the near closing bell,I've noticed a "T",that's the "Dragonfly Doji"Lookout!!! the bulls and the saints will be charging in again.Gear up for the party.http://www.prosticks.com/education/candlestick_patterns/index.php?sid=355cd105f79507780fad8848469baca1
Tuesday's Relief Recovery was part of a historical pattern of bouncing on the fifth day after four down days in a row.
Yesterday's pullback was a result of profit taking.The half body of the long white candlestick is @13,071.84 whereas wednesday closes at 13,231.01 so the bulls are still holding on.

Tuesday, November 13, 2007

Credit Market Losses,worst is over.

Goldman Sachs Group Inc. and Bank of America Corp. stoked optimism that the nation's largest banks may have seen the worst of credit market losses.

Credit default swaps have improved.http://en.wikipedia.org/wiki/Credit_default_swap
Goldman Sachs Chief Executive Officer Lloyd Blankfein told a New York conference yesterday that the largest U.S. securities firm by market value doesn't plan ``significant'' writedowns from subprime-mortgage securities. Bank of America said its losses will be restricted to $3 billion next quarter and UBS AG analyst Glenn Schorr said the potential for losses at Lehman Brothers Holdings Inc. is ``negligible.''

What a sigh of relief after a whole week of sell-off.It's again the big boys who dictate the terms of where the financial markets should head.This is also amounting to rigging the markets.

Citigroup and Merrill Lynch, both based in New York, sparked a selloff of financial shares and debt this month when the firms accepted the resignation of their CEOs and increased writedowns of collateralized debt obligations and other debt backed by mortgages to people with poor credit.

Credit-default swaps tied to the bonds of the world's biggest banks and securities firms soared to the highest last week. Citigroup said it may take an additional $11 billion of writedowns on top of $5.9 billion and Merrill, the world's third-biggest securities firm, increased its losses to $8.4 billion.

There is so much negativity, so much bearishiness priced in, it's not surprising that the market takes a breather, consolidates and re-evaluates.It's a relief rally for the Dow yesterday.

Credit-default swaps, contracts conceived to protect bondholders against nonpayment, pay the buyer face value in exchange for the underlying securities or the cash equivalent should a company fail to adhere to its debt agreements.
Tracking the Dow on Tuesday13/11/07

The bulls went on a stampede at the opening bell with about a 100 points spike.Thereafter it went through a distribution phase.The speed at the opening race will make it exhausted.
At the closing bell,the candlestick was a bearish top signalling profit-taking will be in command in the following session.
The rally was a sign of relief but can it be a short-covering and couldn't sustain?The candlestick have a shaven bottom and top.Somehow or rather it will pullback to its pivot point before it continue its advancing pace.

Time for rebound!

Dow Index futures will be starting their roll-overs before the contract expires on 16/11/07.http://www.answers.com/topic/rollover.Traders will be starting to cover all their short positions and the market is poised to move northward.Normally the activities start 8days before expiry.That's where they have "SELL HIGH and BUY LOW" principles.The subprime rout and yen carry trade are actually old news since May'07 and best kept secret by the market-makers to use as a tool to bring down a market at the right time.Those instituitions release their full scale report at this time of the year just in time for the annual window dressing before they unwind and go for their Thanksgiving Holiday.What a great pre-emptive strike!

Tracking the Dow on Monday 12/11/07
The opening was a "Dragonfly Doji" planning to fly higher.There were many bullish white candlestick depicting the advancing strength.The last hour of trading saw heavy profit taking by daytraders and ended with an "inverted hammer".There were no long shadows beneath it,so a spillover bullish trend is intact.
Will these pair of candlestick,the so called "morning star" transform into a bullish recovery.Looks like it will so as to form the next right shoulder of the Dow.