Daily Market Comments - June 2007
6/29 - Stock Market Comments
The markets traded relatively indecisively on Thursday, which is not unexpected after a big move. Currently the morning futures are showing a more positive bias. The bullish signals formed by both the Dow and the NASDAQ on Wednesday at the 50 day moving average should be a signal that the sideways channel is going to hold. Continue to hold long positions with the expectation of a test near the higher end of the trading channel over the next week or so. Some of the short positions are still working in these market conditions.
6/28 - Stock Market Comments
Wednesday's bullish trading formed a Bullish Engulfing signal at the 50 day moving average in the NASDAQ. After two Doji signals in the Dow right on the 50 day moving average, Wednesday formed a bullish candle closing right at the T-line. This would indicate that the 50 day moving average was once again acting as support in both indexes. The probabilities are now pointing toward prices moving back up to test the upper end of the sideways moving channel. Anticipate the next few days to move with a slightly positive bias.
6/27 - Stock Market Comments
The 50 day moving average will be an important support level today for both the Dow and the NASDAQ. A close below those levels with decisive bearish candles would tell us the Bears are now in control. After the weak open today, the markets need to close positive to show support at the 50 day moving average. Continue to add short positions to the portfolio on weakness today.
6/26 - Stock Market Comments
The market pullback is being done without any great enthusiasm on the Bears part. The market traded higher most of the day on Monday before selling off near the end of the day. These market conditions still indicate a trendless direction. Continue to own both long positions and short positions in the portfolio.
6/25 - Stock Market Comments
The selling on Friday brought the markets back down into the midrange of the sideways trading channel. This may be the mode for the next few weeks until the markets can find a reason to move in one direction or the other. In the meantime, there are sectors that are moving up and sectors that are moving down. Use candlestick signals to take advantage of the lack of direction in these markets.
6/22 -Stock Market Comments
The morning futures are showing weakness after the late day buying yesterday. This oscillation may be the norm for the next few weeks; the summer time blahs. Use the signals to find the strong sectors and the weak sectors.
6/21 -Stock Market Comments
The markets sold off on Wednesday after indecisive trading near the recent highs. The Bearish Engulfing signal in the Dow illustrated that the recent highs were not going to be breached. This puts the markets back in a sideways mode. This is a trading environment where both long positions and short positions should be in the portfolio.
6/20 - Stock Market Comments
The non-direction of the markets yesterday revealed that investor sentiment had not changed. The slow uptrending market conditions are still in progress. Until there is a definite sell signal, the trend will remain as your friend. This provides the opportunity to find the sectors that are showing better strength than the rest of the markets.
6/19 - Stock Market Comments
As the markets are approaching recent highs again, it may not be unexpected to see some choppiness at these levels. There has been some indecisiveness in the past couple of days of trading, although trading has moved higher in both the Dow and the NASDAQ. Monday, the Dow formed a small Bearish Harami, indicating the buying may have stopped at least on a short-term basis. The lower futures this morning would suggest some additional consolidation at these levels.
6/18 - Stock Market Comments
The NASDAQ gapped up on Friday to new recent highs. It formed a Doji at that level but the stochastics are still curling up. This should represent strong buying on Friday with expected confirmation to the upside today. The Dow is still in the process of forming a J-Hook pattern. Watch for more buying in both markets.
6/15 - Stock Market Comments
The Dow confirmed the Bullish Harami on Thursday. Now anticipate a test of the recent highs. The NASDAQ showed good support once again after the bounce off the 50 day moving average. Apparently the core rate inflation figure was very bullish for today's futures. Continue to stay long until a definite sell signal appears.
6/14 - Stock Market Comments
The purpose of using candlestick analysis is to have the ability to project what investor sentiment is doing based on the immediate activity. The selling of Tuesday would have prepared investors for closing out long positions based on the apparent failure of the T-line. However, observing the positive open on Wednesday made the projection of another potential bullish candle likely. The result of a strong bullish day, a Bullish Engulfing signal in the Dow, should have eliminated the prospect of closing out long positions until the final candlestick formation could be witnessed. The choppy sideways market action is indicating a dramatic change is coming. We just now have to watch to see if that's a bullish or bearish change.
6/13 - Stock Market Comments
Tuesday's trading brought both the Dow and the NASDAQ back down below the halfway point of the Bullish Harami that indicated the selling had stopped. That would have negated the bullish signal, indicating that the T-line may be acting as resistance and the short-term bounce was over. The positive trading this morning could be putting the market back into the mode of a sideways movement. Any positions put on in this market atmosphere should be done with the idea of being fairly nimble until the market gets out of a choppy mode and back into a trend.
6/12 - Stock Market Comments
The market indexes all did indecisive trading signals as they came back up to test the T-line. The Doji signals illustrated the battles between the Bulls and the Bears on Monday. The simple rule of a Doji is that the trend will usually move in the direction of where the stock opens the next day. This morning, the futures are showing weakness. This would give a good indication that the Bullish bounce of Friday may merely be a bounce. Be prepared to take some profits in the longs and add some short positions.
6/11 - Stock Market Comments
The positive futures on Friday foretold the Bullish Harami that formed, indicating the selling had stopped. This may just be an initial bounce. Be careful of new selling, but as of now the signals formed on Friday reveal the Bulls have not left the markets completely. A positive close today would add to the bullish sentiment.
6/8 - Stock Market Comments
The selling came in very hard on Thursday, interest rates and oil prices were a concern. The morning futures are slightly higher this morning. Traders can buy today but a candlestick buy signal, such as a Bullish Harami, needs to form today to confirm that the selling has stopped.
6/7 - Stock Market Comments
The weakness in the markets on Wednesday confirmed the sell signals in the major indexes by not holding prices above the support levels, the T-lines for the Dow and the NASDAQ. The consolidation in the markets should be anticipated for at least a couple of days. This provides the opportunity to take some profits in long positions and add some short positions to the portfolio.
6/6 - Stock Market Comments
The Dow closed right on the T-line on Tuesday. A weaker open this morning would confirm a short-term pullback. The NASDAQ formed a Hanging Man signal. A weaker open today would indicate profit-taking. Be ready to take some profits today.
6/5 - Stock Market Comments
The markets opened in the lower range Monday, but closed in the higher range. The weakness in today's futures indicates the more profit-taking occurring up in this area, confirming some of a sideways movement projected for this market. Continue to stay long, but be willing to take some profits in positions that are starting to show weakness.
6/4 - Stock Market Comments
The China market is down 8% today, but that does not seem to be affecting the other world markets to any great degree. Friday's trading produced a Doji in the NASDAQ. Today's lower open in the markets would indicate a pullback in this uptrend for at least a couple of days. Continue to hold long positions that are not showing any great effect on their charts. Take some profits on chart patterns that are showing short-term weakness. They can always be bought back on the next signs of strength.
6/1 - Stock Market Comments
The Dow had some healthy consolidation yesterday after a strong move on Wednesday. The NASDAQ and the Russell 2000 maintained strength throughout the day, indicating nobody was leaving this market yet. Continue to hold long positions.