Daily Market Comments - November 2007
11/29 - Stock Market Comments
The Bullish Harami signals were definitely confirmed on Wednesdayday. The T-line was breached and is not acting as resistance anymore. Investor sentiment did exactly what was required to confirm the bottoming action of the past week. After the huge move of Wednesday, expected some profit-taking early today. Most of the short positions were stopped out with profits on Wednesday. Now start looking for good long buy signals.
11/28 - Stock Market Comments
What is a major factor for indicating a change of investor sentiment? Indecision! Indecision can be found with a series of Doji signals or with very volatile swings in price movements. The Dow chart has illustrated great indecision over the past week of trading. The Bullish Harami signals of the past few days produced the potential of a market reversal. However, these signals were not followed by confirmation. An additional factor was the T-line clearly acting as resistance. Tuesday's Bullish Harami closed very close to the T-line. With this morning's futures showing great bullish strength, it can be assumed that prices are now coming up through the T-line. This should instigate buying strong charts immediately on the open. The end of the day should show a close above the T-line for all the indexes and indicate a trend reversal.
11/27 - Stock Market Comments
Both the Dow and the NASDAQ failed at the T-line on Monday. Obviously this illustrates the downtrend is still in progress. Stochastics have been in the oversold condition for a couple of weeks, which it can do in a sustained downtrend. Friday's Bullish Harami shows some signs of an initial bottoming action. No aggressive buying should be done until a strong buy signal appears.
11/26 - Stock Market Comments
The Friday after Thanksgiving is usually a very lethargic trading day but as we saw, the Dow rallied back 182 points forming a large Bullish Harami. This occurred at the same level where the Dow bottomed out in mid-August. There is always the question of whether a low volume day such as Friday is important for analyzing the charts. Keep in mind, the candlestick signals are the cumulative knowledge of everybody buying and selling during a certain time frame. Friday's trading is part of that picture. Todays futures indicate a flat open. Watch to see if the Bullish Harami gets confirmed.
11/21 - Stock Market Comments
Tuesday's trading formed a Doji in both the Dow and the NASDAQ. That would have indicated the possibility of the trend reversing upon a positive open this morning. However, as we can see, the morning futures are strongly down. The Dow trend will continue until a candlestick buy signal is followed by confirmation that brings the trend up through theT- line. Until then, continue to hold short positions and any purchases of long positions should be done with the idea of getting back out on the first signs of weakness.
11/19 - Stock Market Comments
The Dow formed a Bullish Harami at the T-line on Friday. The NASDAQ formed a Hammer signal. However, with the lower open today, the choppy market enviroment continues. As before, continue to look for strong buy signals but remain nimble after entering any trades. This market has not established any trend yet.
11/16 - Stock Market Comments
The Dow closed more than halfway down the large Bullish Engulfing signal that indicated the Bulls were taking control. A close below the halfway point indicates the Bears are still in control. The morning futures are showing a positive open. Although the stochastics are showing oversold conditions, the next few days of trading should be relatively choppy. Once again, any buying in this area should be done so with the mindset of coming right back out of the positions upon lack of any follow-through.
11/15 - Stock Market Comments
The markets held up reasonably well on Wednesday until the last 45 minutes of trading. This morning's futures indicate some more weakness. This illustrates that all the negative investor sentiment is not yet out of the market. Continue to look for strong buy signals and hold the existing short positions until the markets clearly reveal confirmed buy signals. A couple of more days of choppy trading should be expected.
11/14 - Stock Market Comments
The magnitude of the Bullish Engulfing signal in the Dow on Tuesday, after an Inverted Hammer signal, plainly revealed the bullish sentiment coming back into the market. This was more than a mere bounce. The Kicker type signal formed in the NASDAQ also revealed a definite change of investor sentiment. Buy on good signals but remain nimble. There should be some profit-taking on a short-term basis despite the fact that this morning's futures continue to show strength. Watch the China stocks.
11/13 -Stock Market Comments
The hard selling on Monday in the final hour brought the NASDAQ almost to the 200 day moving average. The Dow closed at its lowest level since the big reversal of last August. This morning, futures are showing very good strength. As usual, be ready to buy but still be nimble. The buying of today's market needs to be seen into the close.
11/12 - Stock Market Comments
The Dow had the opportunity to form a Hammer in the late part of Friday's trading, but the selling came back strong in the final 30 minutes. Both the Dow and the Nasdaq are in the oversold area. These are conditions for watching for bottoming action OR a severe selling climax. In either case, keep your funds ready to buy on opportunities.
11/09 - Stock Market Comments
Although the Dow showed some buying on the close Thursday, the NASDAQ did not show the same Bullish enthusiasm. The Dow closed above the 200 day moving average but stochastics appear to have more downside. It would not be out of the probabilities for the Dow to waffle toward the 200 day moving average for the next few days. The NASDAQ may come back down and test the lows of Thursday. This remains a market condition where remaining in cash is the call of the day.
11/08 - Stock Market Comments
After the huge move in the markets on Wednesday, expect some more indecisive trading until the markets can figure out which direction it wants to go. There are strong sectors in this market, such as solar energy. Remain nimble and have long and short positions in the portfolio. This may seem like a very benign analysis but there are times in the markets when you just have to sit back and wait for better chart information.
11/07 - Stock Market Comments
The past few days showed bottoming action in both the Dow and the NASDAQ. Today's severe weakness in the futures indicates a lack of follow-through from the Bulls. This does not necessarily indicate a Bear market trend, but it does reveal a lack of any forceful trend one way or the other. A sideways action in the markets might be the predominate trend until the $100 barrel oil price is digested and the subprime lending problems are completely accounted for. Owning longs and shorts in the portfolio is still prudent.
11/06 - Stock Market Comments
There were two Hammers in the Dow over the past few days and now a Tweezer bottom is forming. This makes the analysis very simple, the expectation of a positive open would confirm the Hammer signals acting as bottoming signals. The NASDAQ appears to be holding at the 20 day moving average. Currently there hasn't been any severe sell signal that would indicate the Bulls have lost control of the trend. Be prepared to buy longs but always remain nimble.
11/05 - Stock Market Comments
A trend will move in the direction of how the prices open after a Doji. A Doji formed in the Dow on Friday. This made the analysis of the trend for Monday very easy. The NASDAQ also formed a Doji/Hammer. The weakness in today's futures clearly indicate the Bulls did not come in to support the market. The downtrend is still in progress. Short positions can be maintained. No strong buying should be attempted until a confirmed buy signal appears.
11/02 - Stock Market Comments
The hard selling of Thursday saw some panic selling going into the close. Expect some residue selling today and at best expect a Doji type day. However, investor sentiment usually gets altered after a huge down day like we saw on Thursday. I would not be an aggressive buyer until the market shows that the current downtrend has changed.
11/01 - Stock Market Comments
It is not unusual to see a wild market ride on the day of the Fed announcement, only to have the market move exactly in the opposite direction the next day. The Dow and the NASDAQ have opened dramatically lower. But just as it is advised to allow the markets to settle when the first knee-jerk reactions are seen after the announcement, the same is true the next day. Let the end of the day trading tell you what to do.