Daily Market Comments - April 2007
4/30 - Stock Market Comments
The markets had an excellent opportunity to sell off on Friday after a strong week. All the indexes closed relatively strong by the end of the day. Currently there is no indication that the uptrend is not continuing. Continue to hold long positions until a dramatic sell signal appears. Although the stochastics are now in the overbought condition, keep in mind that the stochastics merely indicate overbought or oversold conditions. It will be the candlestick signals that reveal a change of investor sentiment.
4/26 - Stock Market Comments
What is investor sentiment telling us? That the earnings are more impressive than what the so-called experts were projecting. The 13,000 level in the Dow was some magic number that CNBC was making out to be an important milestone. On our charts, it meant nothing. Going up through that level just confirmed what was already indicated by the candlesticks. There was nothing in this trend that indicated any change of investor sentiment. As predicted, a breach through the recent highs has brought in explosive buying. Continue to stay long, but anticipate some profit-taking soon.
4/24 - Stock Market Comments
The uptrend was not altered on Monday. The Dow pulled back but the NASDAQ held steady, indicating that there was just profit-taking, not any selling. If the NASDAQ can break into the new recent high area, that would be confirmation that the Bulls were not concerned that the recent highs were going to act as resistance. They have proven that in the Dow. Confirmation from the NASDAQ would be a good indication that a bullish trend was still in progress. Continue to hold long positions.
4/23 - Stock Market Comments
The strong day in the markets on Friday revealed that the previous high in the Dow was not going to act as resistance. The NASDAQ is currently trading very close to the high from a few months ago. Nothing yet has changed investor sentiment from the bullish mode. Continue to hold your long positions. Short positions should be closed on any signs of strength. This market trend that started with a double bottom is very healthy with no exuberance and a good amount of backing and filling during the uptrend.
4/19 -Stock Market Comments
Although the Dow was up on Wednesday, only 11 out of the 30 stocks in the Dow were positive. The NASDAQ did another Doji type day. Testing the all time highs usually involves an initial test followed by a pullback. Anticipate some more consolidation today. The T-line should be a likely support level in the NASDAQ. Keep in mind, if one index is trading positive while the other index this consolidating, that indicates that money is not leaving the market, it's just shifting from one area to another. Continue to hold stronger long positions. Adding a short position or two to the portfolio is prudent.
4/18 - Stock Market comments
The Dow and the NASDAQ are just now testing the recent highs. Keep in mind, when prices move back up to test an important technical level, such as a an all-time high, it will likely fail the first time. It would not be unusual to see some backing and filling before they can move to higher levels. Weakness today would confirm the Doji signal that was formed in the NASDAQ on Tuesday. There might be a couple days of profit-taking. This will be an opportunity to move out of some stocks that are showing some toppiness. Let the markets confirm the profit-taking before making major adjustments to the portfolios.
4/17 - Stock Market Comments
The gap up on Monday in the NASDAQ, through the area where prices gapped down in late February, was a very strong bullish indication. It told us the gap was not going to act as resistance. Both indexes are very close to testing new highs. Investor confidence is building back up, and there is no concern about a profit-taking selloff, that has already occurred. Continue to hold long positions. If these markets move into new high territory, look for a very strong rally.
4/16 - Stock Market Comments
The strength in Friday's trading moved both the Dow and the NASDAQ up above some potential resistance levels. The NASDAQ is very close to closing the gap that was formed on the big down day at the end of February. Investor confidence will improve dramatically if prices stay up in the area where they were confident before and now have profit-taking pullbacks out of the way. Continue to stay long but be prepared for some profit-taking once the NASDAQ fills the gap. A gap up this morning in the NASDAQ created an Island Reversal effect.
4/13 - Stock Market Comments
The PPI came in lower than expectations, adding some strength to the premarket futures. The concern about the Dow moving up seven or eight straight days is now eliminated with the expected profit-taking, now followed on Thursday by evidence that the Bulls were still in the market. The 50 day moving average acted as support. Although the markets could be getting toppy, there is nothing to show any negative sentiment. Continue to hold long positions.
4/12 - Stock Market Comments
The Dow pulled back on Wednesday to where it just touched 50 day moving average. The NASDAQ formed a Bearish Engulfing signal. Expect a few more days of selling. The 50 day moving average will become an important support level after acting as a resistance level in the Dow approximately 3 weeks ago. Short-term players can be adding some short positions or buying some puts. If the markets show some indecision at or slightly above the 50 day moving average, it can be anticipated that this is just profit-taking. A move down through the 50 day moving average will make the bearish scenario much stronger.
4/11 - Stock Market Comments
With the Dow forming a Doji and the NASDAQ showing a strong candle, this would indicate nothing has changed in investor sentiment. After eight positive trading days, the longest run since 1996, some profit-taking is likely. However, nothing has changed in the investor sentiment, the Bulls are still in control. Continue to hold long positions until a dramatic sell signal appears. Continued buying puts the markets back into the range of where it was trading prior to the big selloff. When it was trading in this range before, investor confidence was consistent and strong. Now there will be a profit-taking selloff completed that should give the Bulls additional confidence.
4/10 - Stock Market Comments
The markets have now gotten back up into the range of where they were trading before the big selloff. The NASDAQ is in the gap area. There should be some expected consolidation after six days of positive moves in the indexes. However, currently there is nothing that shows a change of bullish sentiment. Crude oil prices fell to the 50 day moving average on Monday. If it breaks through that level, Crude Oil prices could drop back into the low 50s. That would add continued confidence in investor sentiment. Continue to stay long.
4/9 -Stock Market Comments
Thursday would have been a good day for the markets to consolidate, a Thursday before a long weekend. However, the continued strength was a good sign. The NASDAQ closed at the same level that it gapped down on the day of the big selloff weeks ago. The employment numbers came out on Thursday morning and boosted the index futures. A positive open today in the NASDAQ, a gap up on the open, would create an Island Reversal. A positive trading day, which is indicated by the bullish premarket futures, would put the markets back into the same range as prior to the big selloff. The positive bullish sentiment, that was present in the steady uptrend prior to the profit-taking selloff, would now be enhanced by the expectation that the profit-taking pullback was over and the uptrend could now continue. The might be the stimulus for the next strong rally.
4/5 - Stock Market Comments
The markets had an opportunity to do some consolidation on Wednesday after a large up-move the previous day. However, the Bulls maintained their stance. The markets maintained a positive trading day most of the day. The longer the indexes remain above the 50 day moving average, the more investor confidence will improve. Currently the uptrend is in progress. The 50 day moving average should act as a support level. Continue to hold long positions and cover any short positions that start showing reversal signals. There is a gap to fill in the NASDAQ. If it is filled, that would mean the Dow would also have come back up into the trading range where the markets were trading prior to the big selloff day. This would be an indication the investor sentiment will back to its positive mode. A strong rally could start from there.
4/4 - Stock Market Comments
Both the Dow and the NASDAQ traded up through the 50 day moving average on Tuesday. This was confirmation that the J-Hook pattern was in progress. The news about the release of the British soldiers this morning should add more investor confidence in the markets. The farther and longer the indexes stay above the 50 day moving average, the greater the investor sentiment will become bullish. The indexes are moving back up into the range of where investor confidence had been relatively stable and bullish over a seven month period. The easing of the Iranian situation will put less pressure on oil prices. This should act as a catalyst for the Bulls to come back into the equities. Currently the J-Hook pattern is the predominant pattern to be evaluating. Continue to hold long positions and cover any short positions that are starting to show strength.
4/3 - Stock Market Comments
The positive trading on Monday confirmed the direction of the market after the Doji. The Dow, trading higher, gave the indication that a J-Hook pattern was in the process of setting up. Today's premarket futures are showing more positive trading. Be prepared to close out short positions and add long positions today. A test of the 50 day moving average on the Dow is likely. The QQQQ's are already showing trading above the 50 day moving average. Asian markets closed higher. Crude oil prices are down about $1.00. Nothing appears to be adversely affecting investor sentiment.
4/2 - Stock Market Comments
Both the Dow and the NASDAQ formed a Doji on Friday. Both did so right at the T-line. Today's trading will be pivotal. Keep in mind, the short-term price trend will usually move in the direction of how they open prices following a Doji. Currently the morning futures are positive. A positive trading day today would make a J-Hook pattern a viable prospect. If we see a retest of the 50 day moving average, anticipate prices going up through that level. A bearish close today would reveal the Hanging Man signal of last week was still in control of this market. The next target would be the 200 day moving average, a substantial drop. Currently, biotechs are acting well in this market. Continue to stay long in the strong charts that have not shown any weakness. If the market closes weaker, add a few more short positions to the portfolio.