Daily Market Comments - November 2006
11/30 - Stock Market Comments
Wednesday's bullish trading created a Morning Star signal in both the Dow and the NASDAQ. This indicated that mass selling was not coming into the market. The 20 day moving average appears to once again be acting as support. Continue to hold long positions. Any short positions that violated the sell signals should have been covered on Wednesday.
11/29 - Stock Market Comments
The indecisive trading of Tueday did not indicate any change of investor sentiment in the current pullback, other than the fact that both the Dow and the NASDAQ are trading very close to the 20 day moving average. Today's futures are showing strength. This would be more evidence that the 20 day moving average is acting as a support level. Short positions put on over the past couple of days should be covered if they are not confirming any selling. If both indexes close below the high end of their trading range today, it would be an indication that the 20 day moving average is still the uptrending support level.
11/28 - Stock Market Comments
As stated in many previous comments, a reversal of the uptrend will require a dramatic sell signal. The extended selling in the markets Monday revealed that the profit-takers were starting to come into the markets with more vigor than had been seen for the past three months. Does this mean we're in for a full scale reversal? Not necessarily, but expect a few days of money coming out of the markets. The 50 day moving average is a likely target for the Dow. This morning's futures indicate more selling. The NASDAQ closed very close to the 20 day moving average. If the trading does not remain near that level, it will provide more evidence that we will see at least two to three more days of profit-taking. Lighten up on the long positions and add a few short-term short positions.
11/27 - Stock Market Comments
As anticipated, the trading of last Wednesday and Friday was relatively uneventful. Fortunately, the stocks that had good strong signals worked very well in the low-volume sessions. The morning futures today do not show any dramatic change of investor sentiment. Continue to hold long positions until something dramatically changes the direction of the markets. That change would require a severe candlestick sell signal or exuberant buying, which would indicate a reversal was about to occur.
11/22 - Stock Market Comments
The trading inactivity on Tuesday did nothing to change the current investor sentiment. That should be the expectation for today going into the Thanksgiving weekend. Continue to hold long positions. The evidence of an uptrending market is revealed in the number of stocks that are still moving in a positive direction. The mix of overbought and oversold stocks remains relatively moderate, no extreme one way or the other. Nothing has changed the slow uptrending market conditions. There will not be a market comment for Friday. The markets close at 1 p.m. on Friday.
11/21 - Stock Market Comments
Although the Dow was negative Monday, the NASDAQ was positive. In market trend conditions such as this, that would indicate that the current trend is still in process. No major selling was evident. The market continues to move in a slow steady uptrend. Continue to hold long positions and some short positions in the portfolio, but when the market is in a slow steady uptrend, the short positions should be covered upon the first signs that the selling has ended. Do not anticipate any major activity in the markets one way or the other during a shortened holiday week.
11/20 - Stock Market Comments
The markets did not show anything on Friday that would indicate a change of investor sentiment. This morning, the futures are showing weakness. There should be a day of selling at some point in the near future. However, if it does not show a severe sell signal, consider it a profit-taking day. The Asian markets are down significantly today. Be prepared for some selling in the Dow and the NASDAQ early in the morning. Lower crude oil prices should continue to maintain strength in the equity markets. Continue to hold long positions but be nimble.
11/17 - Stock Market Comments
The uptrend continues to push for the upper trend line. Today is expiration day for options. Anticipate some volatility. The morning futures are showing a weak open. The recent procedure has been selling in the morning followed by buying in the afternoon. Continue to hold the long positions until a dramatic sell signal appears in this trend. For those who want to hedge their portfolio, the oil service stocks and the mining stocks have shown sell signals. Shorting some of these stocks would be an offset in case the market gets toppy.
11/16 - Stock Market Comments
Both the Dow and the NASDAQ appeared to be heading to the top of the trend channel. This would indicate at least another one or two days to the upside. As investor confidence starts building, start watching for the exuberant buying. Two or three big days in the market would indicate that any money sitting on the sidelines is rushing in, anticipating they are missing the market move. Continue to stay long, be nimble, but expect so more upside. As of now, there is not any candlestick sell signals being revealed.
11/15 - Stock Market Comments
The strength in the markets are evident when the profit-taking occurs in the early part of the day and the buying comes back in at the end of the day. Anticipate the markets coming up to test the upper trend line of the trend channel. This would indicate a few more days to the upside.
11/14 - Stock Market Comments
Once again, there was nothing in the markets to indicate any change of investor sentiment. The uptrend should continue until a dramatic change of investor sentiment is witnessed. That will either be an extremely strong candlestick sell signal or witnessing exuberant buying, a big run-up for a few days, before the sell signal appears. Crude oil prices are not showing any reason for concern. Interest rates are not showing any reason for concern. Continue to hold long positions and short positions that are indicating the proper buy or sell signals.
11/13 - Stock Market Comments
The indecisive trading of the Dow on Friday did not change any investor sentiment, especially with the NASDAQ trading slightly positive on the day. The Dow formed a Doji right on the 20 day moving average. This becomes a valuable signal. A trend will move in the direction of how they open it after the Doji. A positive trading day today will be an indication that the 20 day moving average continues to act as support. A lower trading day would indicate the lack of support at the 20 day moving average. A Double Top in the Dow would become more evident. Continue to hold long positions but be prepared to take profits if this market continues to show some weariness.
11/10 - Stock Market Comments
The Dow pulled back toward the 20 day moving average on Thursday. The NASDAQ also showed some weakness. The Dow almost formed a Bearish Engulfing signal. The NASDAQ almost formed a Dark Cloud signal. However, neither of these signals were true sell signals. They did not quite meet the criteria of a true sell signal. This would imply that there may be some weakness in the markets for the next couple of days but nothing that would change the current uptrend. This market still remains an environment that allows the strong buy signals to work and the strong sell signals to work in individual stocks.
11/9 - Stock Market Comments
The markets digested the election news very well. Investor sentiment is still directed toward the results of the earnings news. This morning's futures are showing slight weakness in the Dow but showing strength in the NASDAQ because of Cisco's strong earnings projections. The uptrend is still in progress. Continue to hold longs that are still providing good chart patterns. Both the Dow and the NASDAQ closed at recent highs, slightly above the highs of last week. This would indicate the probability of the uptrend continuing. A Double Top is now less likely.
11/8 - Stock Market Comments
The Dow and the NASDAQ moved up toward recent highs on Tuesday. Today's action after the elections will indicate which way they will take this market. We need to see a positive close today to demonstrate that the uptrend is still in progress. A weaker close today will reveal the Double Top.
Be ready to take profits in long positions today on weakness at the end of the day.
11/7 - Stock Market Comments
The Bullish Engulfing signal that formed in the Dow on Monday, after a week of indecisive pullback action, clearly indicated that the pullback was over and the long uptrend was going to continue. The recent high becomes the next likely target. That would mean another day or two to the upside at least. Stochastics have pulled back to provide a good potential for upside movement. Continue to stay long until a definite sell signal appears in the market indexes.
11/6 - Stock Market Comments
Although the Dow traded lower on Friday, it was not a convincing selling day. The NASDAQ traded higher most of the day. This revealed that there was not any massive change of investor sentiment regarding the uptrend. The 20 day moving average appears to be an area of support. Be prepared to buy long positions on signs of strength. This morning's futures are once again revealing that there is not any great selling pressure in this market.
11/3 - Stock Market Comments
The Dow formed a Doji right on the 20 day moving average on Thursday. This makes for an easy analysis today. A positive open, which we are seeing with the morning futures opening positive, would indicate that the 20 day moving average was when to hold. Keep in mind, a trend will usually move in the direction of how they open it after a Doji. If the indexes close near the high end of their trading ranges today, this would be a signal that the uptrend will continue and probably head for new highs.
11/2 - Stock Market Comments
The NASDAQ formed a Bearish Engulfing signal Wednesday as the Dow was pulling back also. Stochastics have now turned down with some authority. This morning's futures are indicating that further weakness. Anticipate a couple of days of selloff action. This may not be a major reversal, a top in the market would require a pullback followed by another upward attempt that would fail to come back up to this recent high. We would be taking profits on long positions that are not showing any strength.
11/1 - Stock Market Comments
There was no change of investor sentiment in Tuesday's trading. Continue to hold long positions until a signal reveals that this uptrend is over. This uptrend should continue until evidence of exuberant buying starts coming into the markets. These are market conditions that enhance candlestick signals and candlestick patterns. When the markets are moving in one consistent direction, without the fear of dramatic market moves, investor sentiment is much more easily seen in individual stock patterns.