Momentum Trader Report: 06/29/08

Friday ended a horrible week for the market, and was significant in that the Dow is close to confirming what most traders already knew: We are in a bear market. The Dow is just .1% away from a 20% decline from its record high in October 2007, which would confirm a bear market. This weekly chart shows just how bad last week was.

Not only did the Dow take out the March lows last week, but also pierced the 200-Day SMA. I have read that this has been the worst June for the Dow since the Great Depression. If your account is up this month, then you should feel very good about your trading.

Oil has been the catalyst that is putting pressure on this market. Oil hit news highs on Friday before pulling back. The chart of USO shows that it broke out of its trading range on Friday. Keep and eye on how this breakout holds up.

With all the bad news in the market, it was a great day for a recent pick from here. ATW closed up nearly +6% on Friday with huge volume as buyers pour into this stock. As I mentioned in Thursdays post, this was my only holding going into Friday, and my favorite chart.

HES was on the Watchlist Friday, and hit the adjusted entry point, and only moved higher by .02. If you’re following along, this may not have triggered, depending on the confirmation you used. I use at least $.02 for confirmation, and .03 to .04 for more expensive stocks.

It remains in the Watchlist.

ZEUS was not on the Watchlist, but I posted a chart of this on Thursday along with a possible entry using the Pristine Momentum setup. It moved nicely on Friday with heavy volume and triggered the posted entry price.

Monday is the last day of the month and of the quarter. It’s possible we could see some window dressing. We could also see a bounce in the market shortly, as the market is extremely oversold right now. That doesn’t mean it will happen tomorrow, but we should see some kind of bounce very soon.

Trade Ideas for 06/30/08:

Good luck and good trading!