Recent hike in the stock market lasted several weeks convinced me to stay in the market for awhile longer. Many professional stock blogers mentioned that there is a high possibility of bear market coming soon, so I was thinking of selling what I have now, but could not sell the stocks.

Now the market is about to hit the 10,000 Dow point. And I am somewhat glad that I stayed in even though I haven’t benefited much since most of the investment was bought before the great stock market fall in the last October.

I read today from caracommunity.com that when Dollar is down, market is up. And when the Dollar is up , the market is down. And he provided this link to stockchart.com (http://stockcharts.com/charts/performance/perf.html?$DJW,$USD)

The graphs in fact shows the opposite trend between Dollar and stocks. If so, we can predict the market’s future using the Dollar’s pricing trend. But then how do I know where the Dollar will move to , up or down?

Mr. Bill Cara’s speculation is that the Dallar will eventually turn to upside trend and then there will be bears roaming again.

Next week , there will be lots of corporate earning reports for 3rd quarter. And it is expected that many will be positive reports.

Have a great weekend.

I partially stepped out of current bull trend bit too early and missed some. And now I am watching the market to jump in. But the market is like a crazy and getting higher everyday.

So I am kind of in the dilemma everyday whether to jump in the market or not. But I decided to hold once again. But, I will have to fight with myself not to jump in.

Here is a good reading from BillCara.com Blog.

Markets cheered the Bank of England decision and the relatively upbeat US unemployment report, bourses around the world rallying briskly, as traders concluded the worst of the recession is behind us. Regardless of your market opinion, there was plenty to support your argument.

What to like about the market:
• Since the March low the markets have been making higher highs and higher lows, the definition of an uptrend.
• Solid leadership with technology leading the initial advance, industrial and financials taking the baton, handing off to consumer discretionary.
• Impressive breadth with the advance decline line consistently registering higher highs.
• The market has done nothing wrong, Bears having fumbled the ball each time they had a chance to send the market cascading lower.
• Companies have had little trouble beating lowered expectations
• Interest rates have remained low, with fixed income securities providing little competition for investor funds.
• The government has helped banks rebuild their balance sheets, keeping borrowing costs for financial institutions very low, allowing them to make money on the interest rate spreads.
• Lots of liquidity is sloshing around the system looking for a home, some of which is finding its way into equity markets.

Reasons to expect an imminent decline:
• The rate of deterioration may be slowing, but fundamentals are not conducive to a sustainable recovery.
• Climax runs do not end well; healthy markets take two steps forward, one step back a natural rhythm re-energizing the prevailing trend over time.
• The S&P (+1.34%) has reached the .382 retracement of the Bear market, a natural place for a pullback or termination of trend.
• Put call ratios show excessive optimism, as do assorted polls of investor sentiment.
• The Bear market low of 666 was the lowest low seen for many years; an up, down up sequence is needed to prove a bottom is in. Thus far only an up leg has been recorded.
• Goldman Sachs (GS –1.88%) a leader hit a yearly high yesterday, reversed sharply, and finished extremely weak today. When early leaders fail to participate in a trend, the move is near a reversal.
• Semiconductors (SMH –0.24%) were weak again today. Another stalwart rolling over.

Trading for a living is a humbling occupation; even the best traders make many mistakes each and every day. We have obviously been too cautious the past few weeks having missed out on several opportunities. Note to self-it’s going to happen again, just part of the game, no matter how skilled or prepared you are. Knowing it is part of the game really doesn’t make it any easier since competitive people want to succeed, and aren’t happy under-achieving.

Microsoft and Yahoo reached the deal today. Micfosoft and Yahoo: Search partners

I just quickly checked pre market prices for both Yahoo (YHOO) and Microsoft(MSFT).
YHOO dropped about 7% but MSFT was up about 1.20% .

I was watching MSFT for the past few days to get in, but I am not sure if this is the right time.
Also the Chinese Stock market was down about 5% last night, so I feel the stock market probably tends to go down in general , especially with current overbought market condition.

Yesterday (7/28) MSFT RSI7 values

1. Daily:43.81
2. Weekly:59.33
3. Monthly:58.16

Maybe I should just watch the market for this week.