Daily Market Comments - May 2005
05/02 - Stock Market Comment - May 2, 2005
The 500 day moving average has become a very strong
pivotal point in the market trend. The previous week
illustrated a strong Bullish Engulfing signal in the
Dow right at the 500 day moving average. However,
the next five days of trading did not show any convincing
buying. The Dow came back down to the 500 day
moving average and on Friday it formed a Bullish
A second major bullish signal forming on the
500 day moving average would be a good indication
that it was going to act as a support level.
This morning's futures are showing a positive bias after
Friday's Bullish Engulfing signal. This should provide a
good incentive to start buying.
05/03 - Stock Market Comment - May 3, 2005
The Bullish Harami of Friday in the Dow was confirmed
with follow-through buying on Monday. This demonstrated
that the buyers were still around after the other
bullish Candlestick signal forming at the 500 day
moving average. The NASDAQ had formed a Hammer/Harami
on Friday. Positive trading on Monday brought the NASDAQ
right up to the 500 day moving average.
This morning's futures are trading lower. Today's trading
needs to see some strength by the end of the day
to confirm that the uptrend is getting a foothold.
A weaker day in the markets would be an indication
that the uptrend will be very slow at best.
Crude Oil prices formed a Piercing signal Monday.
This could lead to a day or two of upward movement
in Crude Oil prices. This could cause some consolidation
in the equity markets.
Add some long positions to the portfolio but continue
to maintain the short positions that are not showing
05/05 - Stock Market Comment - May 5, 2005
The strength in the markets on Wednesday gave a clear indication
which way they were deciding to take it out of the congestion
area. The Dow closed slightly above the 200 day moving average,
the first target after it bounced off the 500 day
moving average. The strength in the NASDAQ now makes
the 200 day and 50 day moving averages a logical target.
Expect a few more days to the upside in both indexes
until the stochastics reach the overbought area. However,
there should be some consolidation after the big
At this time, watch to see what the Candlestick signals
are indicating as they hit the resistance levels.
For now, continue to hold the long positions. The short positions
should have been covered on any strength Wednesday in those
05/06 - Stock Market Comment - May 6, 2005
The consolidation in the Dow and the NASDAQ Thursday
was not unexpected as we mentioned in Thursday's
pre-market comment. The evidence of buying showed back up
in the final 30 minutes of trading. The Dow formed a
potential Bearish Harami. The NASDAQ and the S&P
formed Doji's. As discussed in last night's free
chat session, the futures needed to see strong positive
movement this morning to indicate that the uptrend was
still in effect.
Stochastics for all indexes were still pointing up,
not quite yet into the overbought conditions.
This would have given the inclination that the uptrend
was still in effect. However, had the futures revealed
strong weakness this morning, the Bearish Harami signal
that formed in the Dow Thursday would have indicated
that the 200 day moving average was goi