Date:  Mar. 01, 2009

Charts provided by Bigcharts.com

Fundamental Data provided by Investors Business Daily  

F.I.T. STOCKS

Finding High Quality Growth Stocks to Build Healthy Investment Habits.  

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

MARKET HEALTH:

MARKET IN CORRECTION! 

The DOW Jones and the S&P 500 have now cut through major support levels and new 12 year lows.  The big question for next week will be whether this new broken level of support will become the new resistance or whether the Bulls will have had enough of this selling and step back in to drive prices back up above these support levels.  Currently this BEAR market is getting steeper and steeper and we will need to watch carefully for the next areas of support listed below in the Index Charts section. 

The NASDAQ is still trying hard to hold on to its November lows and remains the strongest of the 3 major indexes.  However, if the DOW and S&P cannot break back above their previous support levels it most likely will be only a matter of time before the NASDAQ follows along.

At this point you should all be strictly in CASH right now as the market is still reacting to so much uncertainty in our economy.  If you are still holding some stocks and did not follow your sell rules, you are left with some tough decisions.  These decisions are: do you hold on to the stock through these turbulent times, or do you pick a bail out point.  Your decision in these circumstances will need to be based on your risk tolerance.  I remember an old wise trading friend of mine telling me that if you cannot sleep at night or you worry all day about what is happening to your stock, then it is probably time to cut your losses and relieve yourself of the stress.  It is best to cut your losses and move to cash.  If you truly believe in the fundamentals of this stock and the company itself, you can always jump back in as momentum picks up to the upside.  If you have the patience to hold on and wait through these turbulent times holding the stock, and feel O.K. that the particular stock may never come back, then hold on and see what happens.  

At F.I.T. Stocks it is our job to educate you on building healthy investment habits, so if you have gotten yourself in this situation, please go back and write out an investment plan or follow the investment rules we have set aside for you.  Having an investment plan for how you will invest in stocks is key.  This plan gives you a course of action to follow at all times and takes complete emotion out of your investment decisions.  Your investment plan is your lifeline to successful investing, but only if you have one written down, and only if you follow it.  I will tell you first hand, following your investment plan or your set of investing rules is the hardest thing you will do, but follow them you must, with no questions asked.  If you do not have one written down now, STOP what you are doing and go prepare one.  This is what investors with healthy investment habits do.

Now that you have your investment plan written down, make it a daily habit to check the activity of the stock market.  Everyone you talk to and everyone on the news will tell you their opinion about the markets next move, but do not become a predictor of the market.  Let the major indexes lead the way for they are always 100% right.  The rest of us are only 50%.  The market will eventually tell us when she is ready to rise again; we can merely just monitor her signals on a daily basis.  The more we keep an eye on her movements the more familiar and ready we will be when prices start to turn.  So we must always stay prepared by watching the stock market and by having a list of F.I.T. Stocks that are holding up well.  The only one thing we can say for certain is that one day FEAR will overwhelm the market and this FEAR will exhaust all remaining sellers.  When these sellers dry up and exhaust their last breath, we will witness the buyers step in and take charge of this market once again.  And if you stayed the course, if you remained disciplined, and if you stayed prepared, and if you persevered, you will be rewarded for practicing healthy investment habits. 

Index Charts

S&P 500 : 6 Month Chart with Daily Price Bars.

 

The S&P now rest at 12 year lows.  We had said that the 740 price level was key for the S&P to hold and currently prices have broken through this level and finished the week at 735.  Prices did not crash through with a big bang so we need to still monitor this situation carefully.  Sometimes we can have what is called a false breakout where prices briefly penetrate through a support or resistance level and then immediately snap back.  This is the type of action we need to watch next week.  We need to see if the S&P will pick up in sell side volume and continue lower making the 740 level a new resistance or will buyers step back in and decide to keep the 740 level as support.  One thing is for sure next week will tell the tale so watch the price action closely.

 

S&P 500: ALL DATA with monthly price bars.

VERY LONG TERM CHART!

 

The major area of support for the S&P has been broken at 740.  Currently prices rest at 735.  This week we need to watch the 740 price level carefully to see if prices will immediately bounce back above the 740 level and remain as support or whether 740 will act as the new resistance level, stopping prices from going any further.  If the S&P can immediately bounce back above the 740 level, 800 will be the next resistance.  If we continue lower we may see a quick descent to the 600 level.  This week will be big for the markets so pay close attention. 

KEY AREA of SUPPORT for S&P 500: 740

----------------------------------------------------------------------------------------------------------

NASDAQ: 6 Month chart, daily price bars.

 

The NASDAQ break below its minor support level at 1430 and then through 1400.  The NASDAQ finished the week at 1377, just 27 points above the major support level of 1350 we have listed below.  If the DOW and S&P continue to pick up steam through their major support levels, I imagine the NASDAQ will not be far behind.  Notice the above average selling that took place on the final 3 day's of last week.

NASDAQ: ALL DATA, Monthly price bars.

Very Long Term Chart! 

The NASDAQ is also arriving at a major support level at 1350.  As you can see the NASDAQ has touched this support level 3 different times, as indicated by numbers 1-3.  Number 4 represents the bottom of the bear market that took place from 2000-2002.  At this point the NASDAQ briefly dipped below the lows created at points 1 and 2, held the support level which became the bottom of the bear market and the beginning of the Bull market from 2002-2007.  On the far right of the chart (#3), we are once again dealing with this key area of support and wait to see if this level will hold.  Write the number written below down as it is a critical area that needs to be watched.

KEY AREA OF SUPPORT FOR NASDAQ: 1350

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Top 10 Industries:

1. Metal Ores-Gold/Silver
2. Commercial Services Schools
3. Financepbl Inv Fdbnd
4. Food Flour and Grain
5. Computer Software Medical
6. Retail Wholesale Autoparts
7. Medical Biomed
8. Medical Genetics
9. Oil Gas Trans. Pipelines
10. Food Misc. Preparation

Important Message: