Daily Market Comments - January 2008
1/31 - Stock Market Comments
The warning signal was the Dow forming a Shooting Star/Harami after the Fed announcement. With the morning futures down strong, this is an indication to take some of the long positions off the table. Now we have to watch for a double bottom.
1/30 - Stock Market Comments
The morning futures have been whipsawing as different economic reports come out. The Asian markets took some profits today. We may expect some consolidation in the Dow before the Fed announcements. Remain nimble. Although the positive trading in the markets has diminished, the talk of recession, especially with another hard selling day such as a three hundred (300) point drop in the Dow, could come back to the forefront. The NASDAQ closed Tuesday right on the T-Line. It needs to close above that level today to maintain bullish sentiment.
1/29 - Stock Market Comments
Monday was a day that would indicate which direction the market was going to move. Either the markets were going to fail at the T-Line or indicate whether the Bulls were still in control. Obviously, the Bulls were still in control. Today and Wednesday will probably be influenced by whether everybody thinks the Feds will cut rates either one quarter of a point or one half of a point. As mentioned previously, the longer the bullish trend maintains, the less the recessionary fears will be expressed.
1/28 - Stock Market Comments
Some selling on Friday was expected. However, the magnitude of the selling created bearish signals in both the Dow and the NASDAQ. This occurred at the T-line. Today's trading needs to reveal the Bears 'not' in control. This would require a Doji, a Hammer, or a Bullish Harami to indicate Friday's selling was merely profit-taking in an uptrend versus the end of a bounce in a downtrend. Remain nimble and be prepared to close out long positions on severe selling today.
1/24 - Stock Market Comments
The Hammer signal in the Dow on Tuesday was an alert of a possible reversal. Wednesday confirmed the change of investors' sentiment with almost a test of the previous day's low, followed by a Bullish Engulfing signal. It would not be unusual to expect some consolidation today after a four fifty (450) point swing in the Dow. This morning's futures indicate a continuation of bullish sentiment. Continue to buy but remain nimble, we could expect the negative sentiment to diminish over the next couple of days.
1/23 - Stock Market Comments
To repeat the obvious, the Dow was down 460 points at one time on Tuesday. It closed down 127 points. This created a large Hammer signal. We need to see bullish confirmation of a Hammer signal. This morning, the futures are still showing strong movement to the downside. This would indicate that more time is needed to illustrate the Bulls are starting to step in. Although the Hammer signal represents a possible reversal in the downtrend, until we see definite confirmation do not commit to the longside with any aggressiveness.
1/22 - Stock Market Comments
Where do most people sell? They panic sell at the bottom. When do you want to buy? When there is blood in the streets! This day will be an excellent day to sit back and see when the selling stops. You will be able to use your candlestick signals whether on the one, five, or fifteen minute chart to see when the panic selling ends. If you have been keeping your powder dry, today may probably be a good day to use it.
1/18 - Stock Market Comments
The premarket futures appear to be up fairly strongly this morning. The Asian markets were down quite a bit but finally closed in the positive direction. This would indicate some Hammer signals for the Asian markets. Be prepared to buy today but remain very nimble. The first expectation is a short covering rally. It may not last long but it will be profitable.
1/17 - Stock Market Comments
Wednesday's Doji in the Dow provides a potential signal to be watched today. Will the Feds produce a solution that is to the market's liking? Wait and see. There are good stock positions moving bullish in this market but keep the powder dry until the probabilities are more in your favor.
1/16 - Stock Market Comments
The Asian markets were down big this morning. September inflation was up big, the biggest rise in 17 years. This might deter the Feds from lowering interest rates. That would take away any bright spot for the Bulls. This means there is absolutely no reason to be bullish. So what does that mean? Start watching for a candlestick buy signal! Bottoms occur when there is no reason for bottoms to occur. Keep your powder dry and wait for the buy signal.
1/15 - Stock Market Comments
On Monday the IBM comments were positive. Today Citicorp's comments are casting a negative cloud on the market. Obviously, the market is still looking for direction. Once again the close will be an important indicator of investor sentiment. These are market conditions where buying needs to be specifically directed toward strong bullish signals. If the Dow closes near the top end of the trading range today, it will be the first indication of the market shrugging off negative news. Of course, a close near the lower end of the trading range keeps the market direction still in question.
1/14 - Stock Market Comments
IBM's positive outlook produced very strong pre-market futures. If the markets finish up strong today, it will be clearly evident that there is big volatility occurring in the oversold conditions. This is usually a precursor to a change of investor sentiment. Continue to remain defensive but also be ready to participate in chart patterns that are revealing very strong buy signals.
1/9 - Stock Market Comments
Tuesday's selling in the markets did not confirm a possible Doji reversal in the Dow. The magnitude of the selling broke some important support levels. Investor sentiment obviously is very negative. No aggressive buying should be instigated until this market reveals a definite buy signal. Continue to hold any short positions until something dramatically changes the current sentiment. There is nothing wrong with sitting with extra cash and being ready to take advantage of bottoming signals.
1/8 - Stock Market Comments
The Doji in the Dow on Monday and the Hammer signal in the NASDAQ occurred when stochastics were just getting to the oversold conditions. The Dow is now trading at the same level where it bottomed out last August and November. The positive futures this morning indicate what was needed after a Doji. Be prepared to add to long positions but with the idea that the markets need to close in the positive area today.
1/7 - Stock Market Comments
The severe selling in both the Dow and the NASDAQ last week is now creating an atmosphere of conservatism over the markets. Now there is talk of recession going into 2008. But keep in mind, this thought process is based upon existing conditions. A surprise cut by the Feds or a dramatic increase in agricultural exports could change that outlook at the drop of a hat. The current market trend indicates the stochastics getting toward the oversold conditions. Today's futures show a slightly positive bias but not enough to indicate a change in the bearish sentiment of this market. Expect a bounce but a true reversal will require a strong bullish signal.
1/4 - Stock Market Comments
The employment report is creating the additional weakness in the markets that was anticipated from the charts. Although the Dow tried to show some upward movement on Thursday, the stochastics did not show that we were at the bottom yet. This morning's futures obviously reveal some more selling for today. Do not be afraid to lighten up on some positions until this market bottoms out. To hedge to the downside, consider buying some of the short funds such as QID or SDS.
1/3 - Stock Market Comments
Obviously there were no signs of buying in Wednesday's market. The NASDAQ closed below the 200 day moving average. The Dow closed below the previous support level. However, the first day of trading for the new year did act as a gauge. The continued strength in solar energy, China companies, and the mining companies became much more pronounced. Observe the obvious. This is where funds are obviously being committed to. Until we see a definite change of trend in the overall market, restrict any buying to these sectors.
1/2 - Stock Market Comments
The big money investors have had approximately 2 weeks to analyze what is in store for 2008. The results of that analysis usually shows up on the very first day of trading of a new year. Watch to see which sectors demonstrate strength today. Currently, the sectors we have been following for the past few weeks, the Solar Energy companies and the China companies, are demonstrating good strength prior to the open. After the selling of Monday, today's Futures for the markets are relatively flat. Sit back and watch until the markets indicate which direction they plan to move. Currently the charts reveal higher probability of moving down at least for the next few days.