Mark Fichera currently uses skills learned over the past 40 years to provide investment ideas based primarily on technical analysis. He is particularly well versed in point and figure charting, trend line charts, Japanese candlestick complimented by various technical indicators and...
Published Date: March 23, 2007
Mark Fichera
This letter is coming to you via the Florida East Coast, where housing foreclosures are among the highest in the nation. I have been traveling throughout The Sunshine State for the past five weeks and have had a first hand look at some of the harder hit housing markets in the country. Does that sound like the beginning of the proverbial “Wall of Worry?” Add to this other domestic economic concerns and the numerous international issues, Iraq War, Iran seizing British sailors, Nigerian oil field terrorists, Hugo Chavez, etc., and the Wall appears large and very much a reason for stock market jitters.
The rally through last Friday, March 23rd, recouped approximately 2/3 of the 6% to 7% drop in the market. The quick move down began Tuesday, February 27th and ended with an early Wednesday morning 130 plus point drop below 11,950 for the DOW, before a late day rally resulted in a 57 point gain!! The popular averages did not hit new highs last week, but the market breadth (advancing stocks minus declining stocks) did by a wide margin. This key indicator almost always is a leading indicator for the “Market." Therefore, my position is that of a nervous short to intermediate term bull willing to weather the day to day volatility and the 100 point down days, a la today (March 28th).
Gold and Silver, technically, still are calling for higher prices. Their charts are more constructive than the XAU (Precious Metals Index of 15 stocks), and have been for some time. Near term support for the Index is well defined at the 134 area, with important overhead resistance at 140 to 141. A decisive move for the XAU to and thru 150 would result in a higher chart print and should begin an important leg up for the stocks. The individual components within the Index have not performed as one. The smaller companies show stronger chart patterns than their larger brethren. The emphasis should be on Silver, which I believe will outperform during the next positive move.
I am on the road and leaving for home (New Jersey) tomorrow morning. Departing from Melbourne Beach, Florida before sunrise, so I will sign off for now. Till next month, stay calm and look beyond the day to day market gyrations!!!
The opinions and commentary provided by the advisors in the My Automated Advisor Newsletter are the opinion of those advisors and not of My Automated Advisor.
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