Daily Market Comments - March 2007
3/30 - Stock Market Comments
The Hanging Man signal of last week is still an influence on this market. However, both the Dow and the NASDAQ have tested the 20 day moving average and bounced. Today's trading will indicate whether the Bullish Harami in the Dow will have stopped the downtrend. The Bullish Harami that formed on Thursday, if confirmed with positive trading today, would make an uptrending channel the predominate analytical factor. Lower trading in the markets today would indicate the Hanging Man signal was still the predominate signal of this trend. Lower trading today, a significant candle, would make the 200 day moving average a viable target.
3/29 - Stock Market Comments
The Dow pulled back on Wednesday and just touched the 20 day moving average. The weakness in the markets Wednesday continued to confirm the Hanging Man signal that formed right on the 50 day moving average. However, the futures this morning are showing very strong buying. A strong close today would indicate the market being in an upward trend channel. Any short positions established on Wednesday should be covered if the market opens much higher and does not appear to be backing off in the early part of the day. A second test of the 50 day moving average may be attempted.
3/28 - Stock Market Comments
The weakness in the markets on Tuesday confirmed the Hanging Man signal of the previous day. This could be a failure of the 50 day moving average. That would imply a possible test of the recent lows or even a test of the 200 day moving average. Add some short positions today.
3/27 - Stock Market Comments
The pullback in the markets on Monday followed by the strong close created Hanging Man signals. These signals are occurring still very close to the 50 day moving average. Today's trading requires some bullish sentiment. A weak close today would indicate the 50 day moving average was going to act as resistance. This failure could cause a pullback to the 200 day moving average.
3/26 - Stock Market Comments
The lackluster trading on Friday was not unexpected since it was a Friday. The Dow closed slightly above 50 day moving average. The NASDAQ was off slightly but remained above the 50 day moving average. Continue to hold long positions. However, the 50 day moving average is an important technical level. Today's trading should continue above the moving average. As of now, there is nothing that has changed the bullish sentiment of this market ever since the Hammer signals of two weeks ago.
3/23 - Stock Market Comments
On Thursday the market consolidated as expected. The Dow hovered just below the 50 day moving average while the NASDAQ used the 50 day moving average as support. Nothing changed investor sentiment as far as the bullish mode of the market. However, the 50 day moving average will be an important technical level to watch. A strong day in the markets today will create a potential Tower Reversal. This would imply much stronger upside potential over the next few weeks. Continue to hold long positions.
3/22 - Stock Market Comments
The first target after the evaluation that a double bottom may be forming was potentially the 50 day moving average. That target was reached Wednesday in a one-day move, after investor confidence became more bullish after the Fed report. The NASDAQ and the Russell 2000 both closed well above the 50 day moving average. Another bullish day in the Dow today would create a Column Reversal. Keep in mind what the bullish candlestick signals continue to reveal, investor sentiment is getting stronger the further away prices move from the double bottom. If these markets move back up into the range where they were trading before the big downdraft, that will be a significant plus for investor sentiment, creating the possibility of a Scoop/J-Hook pattern.
3/21 - Stock Market Comments
The Dow and the NASDAQ moved up Tuesday to where they both touched the 20 day moving average. This puts the NASDAQ above the recent peak of the first bounce last week. A strong move above the 20 day moving average today would be further confirmation that a double bottom has formed. Continue to hold long positions. A failure at these levels would be indicative of a sideways moving market. The Fed report will be an important influence on the market today.
3/20 - Stock Market Comments
The strong day on Monday added confirmation to the Hammer signal of last week. Continue to hold long positions. The longer the markets move positive, the greater the probabilities that the fear from the big down days will diminish.
3/19 - Stock Market Comments
The Dow and the NASDAQ traded off on expiration day last Friday. Both indexes are trading just below the trading line. Positive trading needs to be seen in both markets today or else the trading line may be indicating resistance. Any long positions bought today should still be done with the idea of being very nimble.
3/16 - Stock Market Comments
Wednesday's large Hammer signal got the confirmation on Thursday that was required. Both the Dow and the NASDAQ revealed that the Bulls were still present after the Hammer reversal signal. This now sets up a good possibility of a double bottom in the markets. Anticipate further upside using the current market lows as your stops. The double bottom formation would not have any trading back below the open of Wednesday's Hammer signal. Continue to add longs on a cautious basis.
3/15 - Stock Market Comments
Both the Dow and the NASDAQ formed nice reversal signals on Wednesday. The large Hammer / Harami signal indicated that the Bulls had stepped back in. This signal occurred at the same levels that the markets bottomed out last week. Today's trading needs to see bullish confirmation. Continue to keep the powder dry until this market finishes the selling sentiment.
3/14 - Stock Market Comments
The hard selling in both markets Tuesday brought levels back down towards the recent lows. Today's trading will be an indication of what this market intends to do. A positive trading day, a Bullish Harami, would indicate a double bottom. Further weakness from these levels will make the 200 day moving average the primary target. Currently the futures are indicating a relatively flat open. The market movement after the open will be the sign of which way they plan to move the markets today.
3/13 - Stock Market Comments
Each day that indicates the buyers have not totally left the market produces another day that diminishes the fear created from the 400 point drop in the Dow. Monday saw a good slow steady bullish climb in the markets. Today's weakness in the futures should negate Monday's positive trading. These market conditions warrant being nimble.
3/12 - Stock Market Comments
The Dow formed a Spinning Top right on the T-line, the NASDAQ formed a Dark Cloud on the T-line. Today's lower futures should indicate a pullback below the T-line today. A weaker trading day will indicate a probable test of the recent lows. This may be a bounce that is now fizzling. Be prepared to close out recently added long positions.
3/8 - Stock Market Comments
The markets consolidated on Wednesday which was expected after a big move the previous day. It was very important to see bullish sentiment following through today. The morning futures indicate that the Bulls are coming back into the markets. Continue to buy some long positions but be nimble until this market settles itself.
3/7 - Stock Market Comments
Tuesday's bounce in the markets took the edge off the negative investor sentiment. But be careful that this may only be a bounce. Once again, it is advised that any buying done over the last day or so should be with the anticipation closing the trades upon seeing more selling coming into the markets. The NASDAQ formed a good bullish signal whereas the Dow nearly formed a bullish day after a strong down-move. There is a possibility of both indexes bouncing back up to test the 50 day moving average. Until the market shows a definite direction, be ready to move in and out of positions quickly.
3/6 - Stock Market Comments
The Dow and the NASDAQ saw a good amount of selling in the final 30 minutes of trading on Monday. The NASDAQ formed an Inverted Hammer signal. This morning's futures are showing strong buying indications. If you're buying at these levels, be very nimble. It may take a couple of days of bullish trading to offset the negative investor sentiment that has occurred over the past few days.
3/5 - Stock Market Comments
The Dow and the NASDAQ had the opportunity to show some strength on Friday but started selling off during the final hour. With the condition of the stochastics in the indexes, the 200 day moving average becomes a very viable target. This produces two scenarios. If the stochastics have now reached the oversold conditions, witnessing potential buy signals in this area would make a bounce back up to the 50 day moving average feasible. Continued weakness today would indicate that the buyers will not come in until the 200 day moving average is tested. Until the market direction can be identified, keep a good amount of your power dry.
3/2 - Stock Market Comments
The Dow formed a Hammer signal on Thursday, the NASDAQ formed a potential Belt Hold signal. These are bottoming signals. However, the stochastics have not yet reached the oversold condition, although they are close. Expect another day or two of choppiness before the market gives an indication of which direction it will go from here. A bullish move would likely target the 50 day moving average as the first test.
3/1 - Stock Market Comments
The potential Bullish Harami signals that formed in the Dow and NASDAQ on Wednesday required bullish confirmation today. This morning's futures are showing much weaker trading. This downtrend will continue until the stochastics get into the oversold condition. Anticipate the downdraft to continue for at least a few more days. This is a clear illustration that prices move based upon investor sentiment.