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.