Daily Market Comments - October 2007
10/31 - Stock Market Comments
Hopefully we will not see a scary day on this Halloween Wednesday. The morning futures are positive after the Google report. On Tuesday, although the Dow was down, the NASDAQ remained flat to positive. This revealed that money was not coming out of the market. Today the expectation is for the Feds to cut interest rates by one quarter of a point. Whether they do or not, expect some whipsaw action before the end of the day. Continue to hold long positions and continue to be nimble.
10/30 - Stock Market Comments
The Dow just touched the 20 day day moving average on Monday before pulling back. The Nasdaq closed just above the recent high. Today's futures are showing some selling. After the number of bullish days in the recent rally, some profit-taking is to be expected. Stay long but stay nimble when necessary.
10/29 - Stock Market Comments
The strength in the markets on Friday confirmed the patterns. The NASDAQ is forming a strong J-Hook pattern. The Dow closed more than halfway up the large bearish candle of last week and it closed above the T-Line. The uptrend should remain in progress with the potential of passing the recent highs. Continue to stay long.
10/26 - Stock Market Comments
The markets closed very tentatively on Thursday. The NASDAQ didn't show any indication of an uptrend continuing. However, the futures show strong bullish sentiment after the Microsoft earnings report. A positive open today should continue adding to the bullish sentiment.
10/25 - Stock Market Comments
Wednesday's trading, as described in both of the books, was called a 'scary' day, a big selloff day after a couple of days of bullish signals. The fact that the Dow was down 200 points and finished up flat will give the Bulls a shot of confidence. Todays futures are trading positive. This scenario creates a high probability that the uptrend will continue. It's not a guarantee, but a high probability.
10/24 - Stock Market Comments
The Dow closed positive on Tuesday but did not close above the halfway point of Friday's big bearish candle. This means the bearish sentiment has not yet been overcome by the Bulls. The NASDAQ showed a much stronger move Tuesday, closing at the top end of Friday's bearish candle. With the weakness in the markets this morning, anticipate a few more days of choppiness.
10/23 - Stock Market Comments
On Monday the Dow formed a Hammer signal right at the 50 day moving average. The NASDAQ opened lower and closed almost halfway up the previous candle.This morning's futures indicate strength after the Apple report. If you add long positions today, the markets definitely need to close more than halfway up on Friday's candle. A lower close today will be a strong indication that the markets are heading lower.
10/22 - Stock Market Comments
The fact that the markets opened lower on Friday was still an indication that the Doji signals in the Dow had not yet shown any bullish confirmation. This continued the non-aggressive stance for buying positions. The breakdown of the market has now altered investor sentiment. The other world markets have followed suit. The prognosis of the markets continuing to be sloppy, as projected most of last week, still remains in effect. The magnitude of the pullback has now reached the stage where a bullish sentiment has been altered. Most long positions should have been stopped out by this time. With stochastics closer to the oversold condition, remaining in cash until the next buy signal appears is the best policy.
10/19 - Stock Market Comments
The sellers did not seem to be very enthusiastic. Although the markets appeared to be drifting slightly lower or sideways, it is doing so without any great selling pressure. The NASDAQ continues to hold up well. We should consider this to be a profit-taking time frame versus a full scale reversal.
10/18 - Stock Market Comments
The trend will usually move in the direction of how prices open after a Doji. On Wednesday the Dow formed a Doji. Today the futures are showing a weaker open. This should reveal the trend continuing in a downward direction. The Nasdaq formed a potential Hanging Man signal, although the stochastics are not in the overbought condition. A lower open would confirm the signal whereas a positive open would have set up a J-Hook pattern. Anticipate more downside movement.
10/17 - Stock Market Comments
The Japanese rice traders say "let the market tell you what the market is doing". Unless we see a definite sell signal today after the strong reports from Intel and Yahoo, the profit-taking of the last few days should be over. Be prepared to cover any short positions established over the last day or two. The definition of a Bull market is witnessing buying on any news that creates the opportunity to buy.
10/15 - Stock Market Comments
The selling on Thursday created a Bearish Engulfing signal in the Nasdaq. It closed right on the T-line. But as we have been advising for a few months now, there needed to be selling confirmation after the sell signal, a close below the T-line. Friday showed a Bullish Harami in the Nasdaq and a Bullish Engulfing signal in the Dow, both closing above the T-line. Currently, it has to be assumed the uptrend is still in progress. Again, stay long but be aware of possible additional sell signals at these levels.
10/10 - Stock Market Comments
It was clearly evident on Tuesday that the uptrend is still in progress. The scenario remains the same, continue to hold long positions but at some point expect profit-taking. As mentioned before, the small pullbacks continue to make this a healthy market. There are sectors that are working extremely well. Traders continue to exploit the renewed interest in China stocks.
10/9 - Stock Market Comments
There have been no signals to indicate any change of investor sentiment. This morning the futures are showing the Bulls still participating. Continue to hold long positions but be aware that the markets have moved away from the T-line. There should be some backing and filling over the next few days.
10/8 - Stock Market Comments
The strength in the markets on Friday continued to reveal that the Bulls were still in charge of this market trend. Although the Dow did not quite close at a new high, the NASDAQ gapped up through the recent highs after a little Hammer signal bouncing off theT- line. The trend scenario remains the same. Although we are in the overbought condition, there still has not been a signal to indicate any change of investor sentiment.
10/5 - Stock Market Comments
Both the Dow and the NASDAQ have shown healthy, steady uptrends. Profit-taking has occurred during the uptrend. Today's labor report is coming out very favorably as far as the morning futures. Consider the uptrend in progress until a major sell signal appears in the indexes.
10/4 - Stock Market Comments
The pullback in the markets Wednesday was certainly not unexpected. Although the Dow sold off hard, the NASDAQ had a Doji type day which showed indecisive selling. Today's positive futures indicate no rampant desire to come out of this market. Consider the uptrend still in progress until a sell signal is followed by a close below the T-Line. China stocks are still showing great enthusiasm.
10/3 - Stock Market Comments
Anticipate some consolidation for the next day or so until the markets can digest the latest up-move. As of yet, there are no signs of sell signals.
10/2 - Stock Market Comments
Monday's strong move to the upside, breaking through all-time highs, now makes the markets well overbought. It will be important to see what the trading does over the next day or so. Profit-taking should be expected. Any selling needs to be identified as profit-taking or a full reversal. The type of signals formed in this area will be important. Stay long but stay nimble.
10/1 - Stock Market Comments
Friday's trading was fairly lethargic, which was not unexpected after a slow healthy climb going into the end of the quarter. Not a whole lot of positions needed to be shifted by the major money managers. Although the markets remain in the overbought condition, there has been no indication of any sell signals. Anticipate that the uptrend will continue with the logical target being a test of the recent highs. Continue to stay long until a definite reversal signal appears in these markets.