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Daily Market Comments - January 2007

1/31 - Stock Market Comments

Where did January go? The strength in the markets on Tuesday provided more evidence that the slow uptrend was still in progress. This may sound like a broken record, but this is what the market is giving us. Continue to hold long positions with a smattering of short positions until this market trend tells us there has been a change of investor sentiment.

1/30 - Stock Market Comments

The indexes traded indecisively again near the major moving averages. The Dow's stochastics are still in a downward direction. This would indicate another day or two of indecisive trading before a possible move to the upside. The NASDAQ's stochastics are getting close to the oversold condition. The Russell 2000 is in a range where a breakout to the upside is possible. All these conditions reveal that there is no great change of investor sentiment. The uptrend is still intact.

1/29 - Stock Market Comments

The strong selling of last Thursday was followed by an indecisive trading day on Friday. The Dow formed a Doji right at the 20 day moving average area. The NASDAQ formed a Hammer signal at the 50 day moving average area. This provided additional evidence that once again the major moving averages should be having an influence on the slow uptrend of this market. This morning's futures are revealing a relatively flat open. The more time the trading remains near these moving averages, the better the opportunity for the stochastics to get to the oversold area and start curling back up. Continue to hold long positions with a few short positions in the portfolio.

1/26 - Stock Market Comments

The indexes are back to the moving average support levels again. A Bearish Engulfing signal was formed in the Dow on Thursday, negating the positive signals during the prior two trading days. The Inverted Hammer signal that was confirmed in the NASDAQ, bouncing off the 50 day moving average, was negated with a Bearish Engulfing signal Thursday. These bearish signals now require confirmation. Once again, the moving averages need to prove they will act as support.

1/25 - Stock Market Comments

The Dow and the NASDAQ did exactly what was expected after the potential reversal signals right on the major moving averages. The signals clearly illustrated the buy support on those moving averages. On Wednesday, the trading followed through from those signals. The scenario remains the same, the upward trend channel is still in progress with the upper trend line being the likely target. It is very unusual for a trend to remain this consistent this long. Many analysts have remarked that the markets are overbought and expect a pullback. The candlestick signals have clearly revealed what investor sentiment was doing every time prices pulled back and approached the moving averages. The signals provide the advantage of analyzing instantly what investor sentiment is doing at important technical levels. That ability has helped in maintaining long positions during the slight pullbacks in this uptrend.

1/24 - Stock Market Comments

A Bullish Harami was formed in the Dow on Tuesday. It formed right on the 20 day moving average once again indicating the 20 day moving average was acting as support during this uptrend. The NASDAQ formed an Inverted Hammer / Doji signal. This morning's futures are showing positive action. This confirmation of the Inverted Hammer signal at the 50 day moving average area also indicates that the moving averages will continue to act as support. The investor sentiment has not been altered. The uptrend continues.

1/23 - Stock Market Comments

Both the Dow and the NASDAQ came back to the major moving averages as expected. These moves have been experienced previously during this  six-month uptrend. Today's trading requires an indecisive candlestick  signal in both indexes, keeping the trading relatively close to the  moving averages. Stochastics still indicate more downside potential. A  strong down-day would indicate new investor sentiment in this market  trend.

1/22 - Stock Market Comments

The indecisive trading of Friday was probably the effect of option  expirations. The NASDAQ bounced off the 20 day moving average. The Dow  formed an indecisive Doji / Hammer. Neither index revealed any signs of  selling out of the ordinary for the current uptrend. The current  uptrend appears to be intact. 

1/18 - Stock Market Comments

The Dow formed a Doji on Wednesday. The NASDAQ sold off. This  illustrated some indecisiveness in the markets. This morning the  futures are positive in the Dow and the S&P but negative in the  NASDAQ. Anticipate a few days of consolidation, a sideways moving  market. There are not any signals appearing that would illustrate a  change of investor sentiment but the markets appear to be taking a rest  for a few days. Continue to stay long, but be nimble with the charts  that may be showing some weakness.

1/17 - Stock Market Comments

The Dow was positive on Tuesday, the NASDAQ was negative. The PPI  was stronger than expected this morning. This should put a little  damper on the market uptrend. However, anticipate some sideways  action with consolidation after the strong market move we have seen  over the past four days of trading. Be prepared to take some profits if  the market shows severe weakness. If the uptrend is still in progress,  any selling at these levels should be moderate.

1/16 - Stock Market Comments

Both the Dow and the NASDAQ showed good strength on Friday. The Dow  is still targeting the upper trend line. The NASDAQ might be starting  the third leg of a three wave pattern. This would indicate the  possibility of a strong rally from this point. Continue to hold long  positions. There is still nothing that would indicate a change of  investor sentiment in this uptrend.

1/12 - Stock Market Comments

The strong move in Thursday's trading after the Hammer signals right  on the moving averages was not unexpected. The top of the trading  channel becomes the next likely target for the Dow. The NASDAQ gapped  up and produced a strong candle breaking out through a resistance  level. This would indicate the uptrend continuing higher. Continue to  hold long positions with the expectation of at least two to three more  days of a positive trading trend.

1/11 - Stock Market Comments

The selling in the morning, followed by buying in the afternoon, is  a very strong market trend indicator. The daily profit-taking makes the  uptrend more reliable. The trend channel remains the predominent  analytical factor. Continue to remain long.

1/10 - Stock Market Comments

The morning futures are showing weakness in the Dow and the  S&P. The weakness in the NASDAQ futures does not show any great  severity. The sideways movement of these markets will be evident today.  Until a major reversal signal appears, anticipate the slow uptrend to  still be in progress. Be nimble but still lean toward holding the long  positions.

1/9 - Stock Market Comments

Both the Dow and the NASDAQ held up above their 20 day moving  averages on Monday. The early-morning weakness in the markets on Monday  appeared to be caused by higher oil prices. As oil prices came down  later in the day, the markets picked up strength. Crude oil is down  strong pre-market today. This breakdown in price should add more  strength to the stock market. Continue to stay long in this slow  uptrending market.

1/8 - Stock Market Comments

The weakness in the Dow on Friday brought the Dow back down to the  20 day moving average. The NASDAQ formed a Hammer-type signal that  closed above the 20 day moving average. Today's trading will help  indicate whether the moving averages will continue to act as support in  this slow uptrending market. Keep in mind, the longer a trend  continues, the more compelling a reversal signal needs to be to show a  definite change of investor sentiment.

1/5 - Stock Market Comments

The expectation of the markets showing some insights into direction  of investor sentiment is beginning to diminish. The continuation of the  slow sideways movement of the markets, as seen before the holidays,  still seems to be in effect. Until the indexes reveal any strong change  of investor sentiment, anticipate the slow uptrend to continue. The  past two days of indecisive trading in the Dow is the continuance of a  relatively flat trading progress as seen over the past few weeks.  

1/4 - Stock Market Comments

Wednesday could have been a very instructive day. The formation of a  long legged Doji in all the indexes did not provide any directional  information. The long legged Doji signals would have been more  instructive had they been at the top of an uptrend. The fact that the  Doji signals occurred in the middle of a sideways move did not produce  any information. However, keep in mind that a trend will usually move  in the direction of how prices move after a major Doji. Currently, the  slow uptrend of the market has not been changed. Today should indicate  which way the traders plan to move the markets.

1/3 - Stock Market Comments

Today's trading will be very indicative of which sectors are going  to show immediate strength over the next few weeks. Watch for gap ups  and strong bullish candles. That will reveal which sectors the analysis  of the past two weeks has led to going into the new year. With the  strength of the overseas markets on Tuesday and the strength of a  premarket futures, nothing has changed the uptrend bias of this market. 


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