It’s been some time since I’ve put together the weekly report.  Between the power outages, the holiday festivities and a big upgrade here at Self Investors of all software and a move to a new server, I’ve had little time to post here at the blog.  That will continue through the middle of January as I’m taking off for a week of vacation in Mexico to recharge the batteries for 2009.  I’m excited about the coming year and hope you’ll continue to join me as I navigate the wild waters that is the stock market. 

The market has certainly improved over the past several weeks and I’ve been highlighting the ability of the market to shrug aside bad news and hold steady or even rally for decent gains. In recent days the indices have begun to battle that pesky resistance of the 50 day moving average and last Friday managed to really bust through in a big way, albeit on light holiday volume.  On Dec 30th I sent members a report on the current market discussing the renewed vigor of the indices as they tested the 50 dma again.

“Is the 2nd time a charm?  For the 2nd time this month, the indices are attacking major resistance of their 50 day moving averages.  With the first test a couple weeks ago, I cautioned against getting too aggressive because of overbought conditions.  The market had just come too far too fast off the Nov lows and needed to rest and work off overbought conditions.  With a bit of holiday rest, and overbought conditions no longer an issue, it appears the bulls may have their legs back with a nice follow through today on yesterday’s late day recovery. 

Read Entire Post “2009 Begins With A Bang As Indices Push Above 50 DMA, Take Out December Highs” Here

Within the carnage of the 2008 IPO market, we have an announcement of a new IPO filing here at the end of the year that will surely generate some interest (maybe curiosity is a better word) as we head into 2009. FriendFinder Networks, formerly Penthouse Media Group (before Penthouse bought the FriendFinder sites from Various for $500 million and changed its name) have filed a registration statement with the SEC for a $460 million IPO which will by offered by Renaissance Capital.

Read Entire Post “FriendFinder Networks (FFN) Files IPO In Desperation” Here

Just a quick heads up to let you all know what I’m keeping an eye on for tomorrow.  Following that push above the 50 day moving averages in both the S&P and Dow, we have had two days of selling with today’s plunge putting the S&P and Dow back below support of their 50 day moving averages.  The market remains somewhat bullish up here, but it’s critical that we hold the November upward trend line which I’ll be watching on the 30 min charts of the SPY, DIA and Q’s tomorrow.  Below is a look at the 30 minute chart of the SPDR S&P500 ETF (SPY).  You can see the  trend line that was tested again today with a decent bounce in the last 30 minutes of trading to keep that level of support intact. 

Read Entire Post “Upward Trend Line Off Nov Low Needs to Hold: A Look At SPY 30 Min Chart” Here

Last week I discussed the resiliency of the market and the increasing ability to hold up or even rally in the face of bad news.  That resiliency was on display again Friday morning as  the indices sold off ahead of the open on news the Senate failed to pass the auto bailout and more details surrounding the Bernard Madoff 50 billion dollar ponzi scheme, but began rallying almost immediately and closed with a decent gain.  Traders were probably pricing in to some degree that a short term resolution will come from the White House with a longer term plan implemented once the Obama administration takes control of the ship.  My feeling is that once some kind of plan is officially announced, we’ll get a decent move up but just as we’ve seen from other government intervention, the rally will be fairly short lived as reality sinks in. 

Read Entire Post “Madoff Ponzi, Failed Auto Bailout Not Enough To Spook Market” Here

One of the key ingredients for me in trying to determine if a market rally is near after a sustained sell off is how the market reacts to bad news.  That was the theme over the past week and I discussed it with my members a few times.  On Monday traders came back from the Thanksgiving break and took profits in a big way resulting in a nearly 700 point plunge in the Dow.   However, my sentiment changed over the course of the week as the market not only held up, but managed to rally following a flurry of bad news. 

On Wednesday evening I commented to my members that my sentiment was changing a bit to the bullish side…

“Yesterday the market was not able to follow through on the sell side.  In fact, as quickly as the market fell off a cliff at the end of the day on Monday, the market wiped away those losses very quickly yesterday morning.  Most of the gains were wiped away late in the trading day, but the market rallied furiously on hopes that an auto bailout is on the horizon.  As I mentioned to premium members last night, it was a positive day in that the bleeding had been stopped in its tracks and support levels in the Dow and S&P held up.  However,it wasn’t until today that I decided to shift the portfolio from slightly bearish to slightly bullish.  Why?

Read Entire Post “Much Of Bad News Priced In As Market Showing Increasing Strength” Here

Was the last second Geithner rally on Friday enough to save the indices from the abyss?  That is the question I ponder this week.  In last week’s report I discussed the developing triple bottom and the well defined support levels that had held for over a month on a few different occasions, setting up the potential for a market rally heading into a historically bullish time for the market….

But it all fell apart on Wednesday afternoon as buyers were nowhere to be found.  My notes to premium members captured my change in sentiment.

(10:34:50 AM): That relief rally fell apart in a hurry and the Nasdaq
has taken out the lows of the correction now.  I should have scaled
into a hedge up there.. still looking to add one but want to see some
sort of a bounce.

(10:35:48 AM): SPY and Q’s still have support of yesterday’s lows..
just barely.

Read Entire Post “Did Geithner Rally Save the Indices?” Here

Mark Cuban has always said he hates to lose and that passion for "not losing" has him in hot water with the SEC.  The WSJ is reporting that Cuban sold his 6% stake in Mamma.com (now Copernic ticker CNIC) just one day ahead of a tip in 2004 that the company was prepared to dilute the shares through a private investment.   The stock dropped 10%, saving Cuban 750K in losses.

Cuban discussed his purchase of Mamma.com a bit in a blog post at Blog Maverick in March of 2004.

More details emerging…

The SEC alleges that in June of 2004 Mamma.com invited Cuban to participate in the stock offering after he agreed to keep the info confidential, but Cuban knew the offering would be dilutive so within hours instructed his broker to sell his entire position. 

I’ll start out the report this week with a member question because I think it’s a good lead in to what I want to focus on - the technicals.  The question was basically what I thought about Jim Cramer’s prediction that the Dow would drop another 2000 points if GM wasn’t bailed out and his recommendation to sit on the sidelines and/or sell ahead of the news. 

First of all Cramers prediction is just that.. a prediction with a bit of doomsday fear thrown in.  Hey, it makes for a nice headline and gets people talking.  The bottom line is that nobody knows what will happen with GM.   Democrats are in favor of some kind of a bailout as many agree they’re “too big too fail”, with a GM bankruptcy leading to a major domino effect of unemployment.  On the other hand, there are those that would like to see the capitalist system take care of it, rather than prolonging inevitable pain.  As far as an investment strategy goes, it’s tough to disagree with an approach that recommends sitting on the sidelines until the dust clears and for many people that may be the smart way to play. 

Read Entire Post “Triple Bottom, Key Reversal Point to Potential Rally” Here

In times like this, it’s always good to get back to the basics, so I thought I’d post a few basics of stock market investing for the self investor just starting out.  Note that some of these go against the conventional wisdom of Wall St, such as the buy and hold mantra.  It should now be crystal clear that Wall St never had your best interest. 

1. Fire your broker/investment advisor
2. Fire your broker/investment advisor
3. Learn to manage your own money.. nobody has more of a vested interest in your money than you do.
4. Cut your losses quickly and move one!  A stock or ETF has to double to make up for a 50% loss.
5. A 10% gain should almost never turn into a loss for you.. use trailing stops if you have to.

Read Entire Post “The Basics Of Stock Market Investing” Here