Dear Toolbox fans...

As you may know we hold online events and seminars sometimes. We do them via "radio show" format, conference calls, recently we even tried GoToWebinar.

It's interesting to me because each format has it's advantages and disadvantages.

This Thursday Night we are going to use the GoToMeeting platform and do a LIVE event called "Swing Trading Best Practices".

A lot of it comes down to good technical analysis skills and trading discipline. These are skills that once acquired become second nature and allow you to look at the market and see opportunity.

There are also some basic mistakes people make that cost them a fortune. Just avoiding the 3 biggest mistakes people make can really turn things around for you.

Thursday night's event is totally free and will show you how to avoid these 3 big mistakes and put yourself on a course for a lifetime of profitable trading.

Be sure to sign up on the attendee list so that even if you can't make the live event, we can send you the replay.

Register today...it's free!

Also, when you register, you will have to click a confirmation link, then you'll get the information to attend the seminar.

Thanks for using the Market Toolbox Desktop  Financial Portal.

http://www.the-market-toolbox.com/download.html

Monday, July 28th, - Current Market Analysis Last Week's Market Experiences Rally, Followed By Sell Off

Weekly Market Recap: It was a roller-coaster last week.

Monday, Markets began week with subtle pullback. The S&P 500 banged its head on the 20-Day moving average and deflected to the downside. Also there was a small retracement to the upside in the price of oil and this helped to curb the enthusiasm of investors. The Dow closed down 29.23 or -0.25%. The S&P 500 was down just 0.68 of a point or -0.05% and the Nasdaq finished down -3.25 or -0.14%.

Tuesday, saw somewhat of a surprise rise in the markets as they punched up through their 20-day moving averages tripping up many traders who saw the market ready to come down. The indexes opened on weakness with many gap downs and appeared ready to trade lower based on the technical picture, however things stabilized early on. Oil continued its decline and in a late day rally the indexes began to climb. By day's end, the Dow had risen 135.16 points or +1.18%. The rally lasted all the way into the close and the markets ended the day with great strength.

Wednesday, Oil continued its drop, and allow the markets creep up even higher. There was a small gap at the open for the indexes from follow-through momentum after Tuesdays strong rally. At one point the Dow was up over 100 but settled down at 11,632.38 +29.88 or +0.26%. The Nasdaq finished up 21.92 or +0.95%. Finally the S&P 500 ended the day up 5.19 or +0.41%. There were over 100 companies that reported earnings, many of them disappointing, still the market has been clawing its way higher mostly due to the optimism related to lower oil which hit a six-week low today, dropping more then 3.1% to end at $124/barrel, that's down $20 a barrel since hitting a record above $147 just a few weeks back.

Thursday, the markets opened and quickly went into a free fall that lasted the entire day. The Dow ended the day 280 points down and the indexes ended the day back down basically where they began the day Tuesday morning just before the rally. It was really just a matter of time before we got this small correction. The market had gotten itself very overvalued with a stochastic reading up at 80. The last time the stochastic was that high was 3 months ago. The indexes had closed 6 days straight above their 5-day moving average and were just sitting below downward sloping 35-Period moving averages.

Friday, the markets leveled off after Thursday's drop but made little headway in an attempt to advance. The Dow ended the week at 11,370.69 up just +21.41 or +0.19% for the day. The S&P 500 rose +5.22 or +0.42% to close the week at 1,257.76. The Nasdaq was a little stronger climbing +30.42 or +1.33% to finish the week at 2,310.53.

You can see Tuesday's strong move with Wednesday's follow-through on the 60-min chart above. You can then see Thursday's steep sell-off with the S&P 500 dropping down through its 30-period moving average. Friday the markets basically traded flat.

The indexes are BELOW their 30-week moving averages.   (The 30-Week SMA is a barometer of longer term strength or weakness - See Weekly Charts Below)

What To Expect This Week

The Big Picture. All Indexes Still In Official Downtrend. On the weekly timeframe, you will see that the Dow and S&P 500 indexes are trading down below their 30-week moving averages, and are still below their major downward sloping overhead resistance lines. Also, on the daily timeframe the 3 indexes are trading below downward sloping 200-Day moving averages. On the monthly chart, the market is STILL BELOW its 15-month moving average and dropped back down below its downward sloping overhead resistance line. (See Monthly Chart Above)

What To Expect   We are on the fencepost at the start of this week. We still have a market that is slightly overvalued but we have lots of opposing forces at work here which will make the begining of the week interesting. For instance, if you look at the first weekly chart above you will see the market below the major overhead resistance line after trying to punch up through it.

Take a look at the second weekly chart and you will see the index just slightly above the SUPPORT of the March lows. The S&P 500 is just two days down below its 5-Day moving averages, but is sitting above a strong support level at the 1250 zone, which is visible on both the daily and 60-min timeframes. There has been a fairly large surge in the financial sector, but I really think that it is a "suckers rally", and this short term bubble is just starting to burst, so you could see this create a huge drag on the markets again.

Finally we have the markets inverse relationship to oil to contend with. If you take a look at the daily chart above, you will see that crude as been in a free-fall since it broke below its support line and fell through its 50-Day moving average. A lot will depend on what oil does at the beginning of the week. Oil still has room to fall to hit some support at the $120. Oil could attempt a surpise oversold rally though at any time... so this is the one big variable in the picture that will no doubt act as a strong catalyst on market direction either way. I hate to say it, but this is one of those "wait and see weeks".

Sincerely,

Bill & Doug
Investing Systems Inc.

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