Daily Market Comments - October 2006
10/31 - Stock Market Comments
There should not be anything scary in today's Halloween trading. Although the Dow was just slightly off on the day, the NASDAQ showed positive trading. This clearly indicated there was no change of investor sentiment in the current uptrend. Crude oil prices continue to drop, showing the lack of credibility of the OPEC's nations being able to cut production. Continue to hold long positions until a definite change occurs in investor sentiment, the witnessing of a severe sell signal.
10/30 - Stock Market Comments
The Dow formed a Bearish Engulfing signal on Friday. The NASDAQ showed a bearish candle, but it was not a signal. Anticipate a couple of days of profit-taking. The markets have had a good, steady up-move. Until a dramatic sell signal reveals a change of investor sentiment, the trend should still be the predominant indicator. This morning's futures are opening weaker. However, there is not any dramatic news out there that would currently change investor sentiment yet. Continue to hold long positions but be ready to take some profits on charts that are starting to break down. Crude oil prices do not seem to be a factor. Interest rates do not seem to be a factor. Anticipate today's trading as continuation of profit-taking that started on Friday.
10/27 - Stock Market Comments
The trend continued Thursday with no signs of any change of investor sentiment. The trend is very healthy in that the profit-taking occurs during the day with the buying coming back in before the close. With so many days to the positive side, expect some profit-taking in the next few days. However, unless there is a severe sell signals, illustrating a definite change of investor sentiment, this uptrend should continue. Stay long and be nimble.
10/26 - Stock Market Comments
The uptrend in both the Dow and the NASDAQ remains healthy. The uptrend should continue until we see the exuberant buying coming into the markets. Until that time, continue to hold your long positions. Although crude oil prices showed strength on Wednesday, it more than likely is just a bounce. The integrity of OPEC's production cuts usually becomes very suspect after a few weeks, each nation wants to crank out as much oil as they can at these higher prices.
10/25 - Stock Market Comments
Nothing changed the upward direction of the markets. The Dow was up, the NASDAQ was down. This indicates there are no sellers in the market yet. Continue to hold long positions. This is a perfect market for maintaining positions where the candlestick signals reveal strong buying and shorting positions when strong sell signals appear. Positions are now moving based on the action of their individual signals versus being influenced by large market swings.
10/24 - Stock Market Comments
It is another strong day in the Dow, the NASDAQ is decently bullish. The combination of the two reveals nothing more then continued bullishness in this uptrend. As recommended in the previous ten trading days, stay long but watch for a severe sell signal.
10/23 - Stock Market Comments
The markets traded lower all day on Friday but showed strength going into the close. This kept the trading very much in the middle of the uptrending channel. Nothing yet has changed investor sentiment. Continue to hold long positions. Add short positions occasionally as charts indicate strong sell signals, such as Kicker signals to the downside. Be nimble and watch for a severe sell signals.
10/20 - Stock Market Comments
This morning the futures are down hefty due to the Dow and the Caterpillar report, while the NASDAQ is relatively stable due to the Google report. Over the past few days of trading, the Dow has remained relatively positive while the NASDAQ sold off a little bit. This is typical of a trending market. When one index is showing reasonable strength while another index may be selling off, it is a good indication that the money is not leaving the market, just moving from sector to sector. As recommended over the past few weeks, continue to hold long positions but be nimble. The uptrend should continue until a severe sell signal is witnessed.
10/19 - Stock Market Comments
The Dow traded positive on Wednesday but closed well off its highs. It almost formed a Shooting Star signal, but not quite. The NASDAQ formed a Two Dark Crows signal. This signal is created from a dark candle followed by a second dark candle that opens where the first dark candle opened but proceeded to go back down the second day. This is a bearish signal. The markets may be getting a little bit tired. Expect a possible pullback at these levels. However, until both market indexes reveal a strong sell signal at the same time, anticipate that the trend will still be the major analytical factor. Be willing to take some profits in positions starting to show weakness but also be ready to reinvest if the trend channel indicates support.
10/18 - Stock Market Comments
The early morning selling on Tuesday was the first sign that the sellers 'might' be taking control. However, by the end of the day, the Bulls that have been controlling the trend came back into the market. The uptrend, that has been evident for the past two months, remains the predominant indicator. Today's morning futures show more upside potential. The uptrend will continue until a dramatic change of investor sentiment becomes evident. That should be in the form of a large price move in the indexes in the overbought conditions. When you see exuberant buying coming into these markets, be prepared to take profits. That could be today, or it could be two weeks from now. Stay long but be nimble.
10/17 - Stock Market Comments
The Dow is approaching the 12,000 mark. This may not have any great relevance other than 12,000 is a round number. Monday traded as a relatively strong day, not showing any signs of investors selling. However, this morning's futures indicate a possible pullback, which would not be unusual after the number of days that have traded positive in the indexes. Expect some consolidation but until a severe candlestick sell signal appears, the uptrending channels in these markets are still the predominant indicators. Crude oil prices and natural gas prices are moving higher, this could lead to a short-term selloff in the equity markets. Be prepared take some profits today.
10/16 - Stock Market Comments
Thursday's strong bullish day provided an opportunity for Friday to be a consolidation day. Trading did move lower most of the day on Friday but came back up in the final hours to trade positive in the Dow. The NASDAQ traded positive most of the day. This clearly illustrates that the Bulls have not left this market. Both indexes are trading above the upper trend channel which had been acting as resistance for the past couple of months. Stochastics are in the overbought conditions. This all leads to a potential pullback. However, there has not been any candlestick sell signals yet in this market. Continue to hold long positions until a definite sell signal appears.
10/13 - Stock Market Comments
The indecisive trading in the Dow in the previous five trading days produced one of two scenarios, on weakness Thursday it could be anticipated that profit-taking would take the Dow back down to the 20 day moving average. On strength, it would indicate that the uptrend was still in progress. A rule of thumb is that after a series of indecisive trading, the direction of the trend will be seen by how they move the price after that period of indecision. After the strong move of Thursday, we would not be surprised to see some consolidation on a Friday. Continue to hold long positions until a severe sell signal appears.
10/12 - Stock Market Comments
The early-morning selloffs in the markets were followed by buying going into the close. This illustrates that the Bulls have not left the markets. Continue to hold long positions until a definite sell signal appears. The positive morning futures indicate that there is no selling yet coming into the market. Continue to hold long positions
10/11 - Stock Market Comments
Once again the markets did not show any evidence that the Bulls were starting to step away. This morning, the futures are showing weakness, but not to any great magnitude. Alcoa reported good earnings but it was not anywhere near the projections. That appears to be the cause for the weakness this morning. Continue to hold long positions until a dramatic sell signal appears in this market. Potential short positions should be identified, in preparation for the breakdown of the trend. However, as of now there is still no evidence it would alter the uptrend.
10/10 - Stock Market Comments
The Korean nuclear test was a perfect opportunity for the markets to take some profits. Both the Dow and the NASDAQ have been trading in the overbought condition. However, as was seen in Monday's trading, the Bulls continued to show their presence. This morning's futures are also showing just a very slight positive bias. Continue to hold long positions until a severe sell signal indicates that this uptrend is over. Crude oil prices are still in a downward trend channel. Interest rates, on the other hand, are moving back up slightly, but not yet to the magnitude of disturbing investor sentiment.
10/9 - Stock Market Comments
The Dow formed a Hanging Man signal on Friday. The NASDAQ formed a Spinning Top/Harami. Both signals indicated indecision. The news of the Korean nuclear test is now putting more doubt in the markets. The pre-market futures are showing some weakness but not nearly as much as might be expected. Continue to hold long positions but be diligent as to what the markets do today. The Korean news could become a psychological deterrent to the uptrending market. A weak close today in the markets would confirm the potential reversal signals of Friday. Be prepared to lighten up on the long positions.
10/6 - Stock Market Comments
After the large bullish day on Wednesday, seeing some consolidation on Thursday would not have been unusual. However, what little consolidation there was got followed by buying going into the close. This produced another day above the recent upper trend line. This morning the futures are a little bit weak after the jobs report. It would not be unusual to see some consolidation today, on a Friday. Continue to hold long positions. As mentioned in last night's chat room, there are numerous stock charts that are showing excellent buys. Interest rates in crude oil prices do not seem to have any deterring effect on investor sentiment. The uptrend should continue until we see that severe reversal signal.
10/5 - Stock Market Comments
After attempting to break through the upper trend channel for the last couple of months, the Dow went through Wednesday with good conviction. The NASDAQ had a huge day as well. This morning's futures are not showing much of a consolidation. Unfortunately, the decision from OPEC to cut production is adding strength to the crude oil prices. This can now be the damper that slows down the uptrend in the equity markets. Same-store sales are extremely strong this morning. As of now, there is no signals to indicate that the uptrend is over. If the indexes move up from this level, any pullbacks should see support on the upper trend line that has acted as resistance for the past few months. Continue to stay long until a dramatic sell signal appears.
10/4 - Stock Market Comments
The Dow closed at an all-time high on Tuesday. However, it has done so in a stealth rally. Although the Dow is at an all-time high, many stocks/sectors have just been limping along for the past few months. This morning the futures are down slightly. The NASDAQ came back and just touched the 20 day moving average Tuesday before forming a Spinning Top. Stochastics are still heading down. This scenario would indicate a day or two of a sideways moving market until the stochastics can start bottoming and curling back up. Continue to hold long positions. Short positions established in a last couple of days need to be watched closely. Crude oil prices will continue to have a bullish effect on the markets if they keep dropping as fast as they have over the past month.
10/3 - Stock Market Comments
The Dow did not show as much weakness on Monday as the NASDAQ. This morning's futures are showing the NASDAQ opening right near the 20 day moving average, the expected target of the lower end of the trend channel. Be prepared for support at that level. Crude oil prices keep showing weakness. The 10 year treasury note is maintaining its strength, keeping interest rates relatively low. The upward trend channel in the Dow and the NASDAQ should still be the predominant analytical factor. Expect trading to support at the lower end of the trend channel and bounce again. A breakdown through the lower end of that channel would indicate a change of investor sentiment. However, there does not seem to be anything that would stimulate that change.
10/2 - Stock Market Comments
The top of the uptrending channel once again deterred any strong buying breakout. Although a close at an all-time high in the Dow is dominating the news broadcasts, it is still a less important factor than the overall investor sentiment. The weakness in the markets on Friday, a Bearish Engulfing signal in the NASDAQ and almost a Bearish Engulfing signal in the Dow, indicated that the uptrending channel was still the dominant analytical factor. Anticipate a day or two of a pullback but the pullback will continue to remain in the upward trading channel. Any short positions put on during this time frame should be done with the idea that those positions should be covered very quickly if the uptrending channel remains intact.