Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Breakfast with Brodsky


The second everyone stops looking for me I promise I'll show up!

Good morning, as we head into the first official week of Spring, we are met with a slew of geo-political news and the fact that most foreign markets are down significantly. With no economic or corporate news of note today, the market may very well lack a noteworthy catalyst to get it moving back to the upside.

With the lack of corporate news and such negative geo-political news, a look at the technical health of the indices may provide us clues as to where we are headed. The NDX seems to be holding onto 1400 by a thread. The level was tested four times last week and Friday's close on its low does not bode for the bulls. Taking a larger look at the index we look like we could test the 200-day MA (1378) and that is the first level of support. If that breaks we could be in an extended correct down to the 1323 level which represents a 38% retracement from the March 2003 lows to the January 2004 highs

On Friday I had touched on the scenario where the market (mainly the S&P) had just completed a corrective wave 2 and may be ready to trace out a longer wave 3 which could possibly take us down into the 1060 area. With the S&P futures trading lower this morning, it looks as if this theory may get tested. The 1100 area (last week's low,) is extremely important if this market is to hold in the near term.

I have been discussing the recent pullback and trying to take a larger approach to analyzing the market as we are heading through some rough waters. One thing that is different, in my opinion, is the recent harshness of these market pullbacks, both here and abroad. The technical shape of both the major and sector indices are poor at best and the condition of the world isn't much better.

Times are changing and the way we do business and with whom is on a much more global level and that's why issues in Asia, the Middle East, or anywhere else can and do have a major effect on us. We have seen the price of oil continue to rise and we may in fact never see it fall to the prices which we have become accustomed to over the years. This is a reality that must be accepted and which will no doubt drive the costs of doing business higher. Does this mean that we will have a linear rise in prices with no pullback? I doubt it will work out like that but this is an issue that is here to stay (as it has been since the 1970's.)

My point is simply that as we head into the future and take stock of our own economic health one must factor in the global playing field as well. With many regions of the world that are currently highly unstable, we must consider how this will affect our "recovery" and if we are beginning to discount this now. Good Luck.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

Featured Videos