Stock Market Report February 4, 2009 2/4/09

Today 2/4/09, the stock market futures are bouncing due to the ADP employment report released at 8:15am. The ADP report showed a loss of 522,000 jobs in the private sector. This news is actually better then expected and you might see stocks rally today. The big number comes on Friday, Feb 6th, as the Government will release the real employment report. This employment report will include the unemployment rate and how many jobs the US lost in January. I will also be looking to see if they revise down the December report since Wall Street did not seem to believe the data.

I will be watching key technical levels today on both the Nasdaq and Dow Jones. I feel the stock market cannot have a sustainable rally until our Government provides some clarity on the banking situation. We need to get these toxic assets off their books somehow or these banking stocks will continue to slide. This will drag the rest of the market down with it. We also need some clarity on the stimulus package.

Oil Markets February 4, 2009

Oil is rising back above $41 today as we await oil supply data coming out later this morning. Oil is finally starting to go up on bad news, the best indicator if you are trying to find a market bottom. If Oil gets back above $43 I think you could test $48-$50 resistance area. Opec is talking about cutting more supplies which is good for the oil market.

Stocks to Watch - 2/4/09

DryShips ( DRYS ) - Drys seems to be back at it again but will now have resistance at around $7.28. I only like this stock over $10, but that's just me. A guest was on CNBC this morning talking about the Baltic Dry Index and says it is improving. This would be good for the world economy. Today, the BDI was up huge and has been up for 13 straight days. This is huge for the bulk shipping stocks.

Disney ( DIS ) reported worse then expected earnings...the stock is down 5%

News Just out: Commercial real estate prices are falling fast! Commercial real estate loans are defaulting at a higher rate.

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DryShips DRYS Stock up 13% 12/09/08 - Pre Market

Today, 12/9/08, DryShips ( DRYS ) is one of leading stock gainers in pre market trading. DryShips is up 13% in early trading after going up 50% yesterday.

There really isn't any news with this stock as the sector is just extremely oversold and when you have these big bear market rallies, the most beaten down sectors tend to get the biggest bounces.

Dryships has hit my $8 target today in pre market and if Drys can remain strong, it could potentially see $10-$12.50 which are the next two resistance points. I would be cautious as Baltic Shipping Rates are still at rock bottom. This could be only a short squeeze! The true test is if the overall stock market starts to roll over, you see these bulk shipping stocks ( DRYS, DSX, EXM ) staying semi strong rather then totally rolling over.

To be continued.......

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DryShips ( DRYS ) - Baltic Shipping Index Turns Higher

For the first time in awhile, the Baltic Shipping Index has turned higher. This is making stocks like DryShips ( DRYS ), Excel Marinetime ( EXM ), TBSI International ( TBSI ), and Diana Shipping ( DSX ) to all move higher.

Out of all of these, I really like DryShips ( DRYS ). Now that the bottom has been established around $65 last week, I think it is set to move higher to test the $85 level. Drys hasn't closed over this level in awhile! I believe a close over $85 would start a nice uptrend and break out.

Trading Drys - While DRYS is $74 right now, I will be buying any dips under the $70 level. I think the trend is changing as we speak from downtrend to uptrend. Keep an eye on Drys and keep an eye on the baltic shipping index!