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Daily Market Comments - July 2005

07/01 - Stock Market Comment - July 1, 2005

Good Morning,

The selling after the raising of the interest rates
was a reaction to not hearing any determination that the
interest rate increases were over. However, Crude Oil prices
dropped another $1.00. Look for a Doji-type day today
before the long weekend. If so, anticipate some buying
coming into next week, forming a second Morning Star
signal like we saw last August.

Have a safe Fourth of July!

07/05 - Stock Market Comment - July 5, 2005

Good Morning,

There was nothing exciting on Friday before the big
weekend. The futures are showing some weakness this
morning. Usually the week after the 4th is a good bullish
week for the markets. However, Crude Oil prices may be
the depresser in the near future.

Volume may be low for the next few days. Stay long
in most of the portfolio with a few shorts mixed in.
Specific sectors are still acting well either up or
down in this market.

07/06 - Stock Market Comment - July 7, 2005

Good Morning,

The strength in the markets on Tuesday, after the long
holiday weekend, is the usual rally that is typically
associated with the week after the 4th. The DOW has
now formed a second Morning Star signal in the past
week and a half. This should predict a bottoming
action, a sideways action at worst.

Continue to hold the long positions. The short positions
should have been closed with profits in the past two
days of trading.

07/14 - Stock Market Comment - July 14, 2005

Good Morning,

The scenario has not changed, the uptrend is slow but
healthy. Continue to hold the long positions.

07/15 - Stock Market Comment - July 15, 2005

Good Morning,

The NAS and the S&P formed Doji's Thursday while the
DOW produced a strong bullish candle. This should indicate
that there may be some consolidation in some areas but
overall trend is still up. Crude Oil is showing weakness
after a strong Bearish Engulfing signal of five trading
days ago.

Continue to hold the longs but expect some sector rotation.

07/18 - Stock Market Comment - July 18, 2005

Good Morning,

Last Friday the Dow and the NASDAQ formed Doji or
Spinning Top signals. This indicated some indecision in the
overbought area. Friday was an option expiration day.
H owever, the market signals are the cumulative knowledge
of everybody that is buying and selling during a time
frame.

The Dow is showing indecision at the recent high
formed in late June. A pullback from here, especially
with some indication of weakness in the futures this morning,
could possibly be a test back to the moving averages.
Consider taking some profits on weakness today.

07/19 - Stock Market Comment - July 19, 2005

Good Morning,

What could have been the potential for a sell-off
after the Dow formed an Evening Star signal may be
negated this morning with the futures acting much stronger.
The IBM report has produced new confidence.
Unless the market creates a Bearish Engulfing signal today,
continue to stay long.

07/20 - Stock Market Comment - July 20, 2005

Good Morning,

With the stochastics showing the markets in the
overbought condition, a toppy pattern may be forming
when each day can be influenced by a major earnings
report. The next few days should be a period of time
when profit-taking can be executed in charts that are
starting to show sell signals. However, there will be
charts still acting strong in this market.

A pullback to the major moving averages would not
be an unusual occurrence. The Dow formed an Evening
Star signal over the past few days prior to Tuesday's
strong trading. It appears as if the market could open
at the lower end of Tuesday's trading. That would be
a bearish signal.

07/21 - Stock Market Comment - July 21, 2005

Good Morning,

Oil prices appear to be heading for the 50 day
moving average. Interest rates appear to be staying steady.
Both of these factors should lead to further investor confidence.
The uptrend is still intact with the fact that any
early selling during the day is followed with buying
near the close. The NASDAQ formed a Kicker-type signal
on Tuesday and showed continued buying on Wednesday.
The Dow has closed above the June highs and the stochastics,
although overbought, are still in an uptrend.

Although the markets could appear toppy in this area,
there are numerous sectors that remain very strong.
Continue to hold the strong stocks. The market conditions
are such that profits will still be made in specific
sectors even if the indexes decide to pull back and test
the recent moving averages that they breached.

07/22 - Stock Market Comment - July 22, 2005

Good Morning,

The Dow formed a Bearish Engulfing signal on Thursday.
The NASDAQ, although it pulled back, did not form
a Candlestick sell signal. Both indexes are in the
overbought area. The Dow formed an Evening Star signal
about a week ago. This scenario is indicating that there
should be some toppiness in the markets in the near
term. This does not necessarily mean a full-scale
pullback. It would imply some profit-taking and
some sideways movement in action.

Crude Oil prices have come back and tested the 50 day
moving average as the signals had indicated. Weakness
in Crude Oil prices should maintain some strength in the
equity markets.

Specific sectors, such as oils and mining are still showing
good strength. Continue to hold the strong stocks
and consider taking some profits on charts that are showing
visible sell signals.

07/25 - Stock Market Comment - July 25, 2005

Good Morning,

The Bearish Engulfing signal in the DOW on Thursday
was not confirmed on Friday. Stochastics indicate the markets
being in an overbought condition. However, the uptrend has not
shown any severe sell signals. The longer an uptrend persists,
the more definite a sell signal should be. Otherwise
the uptrend remains intact.

Continue to hold the long positions. Currently, there are
numerous sectors that continue to show strength.
Crude Oil prices showed a bounce on Friday but nothing
that would indicate a trend reversal.

07/26 - Stock Market Comment - July 26, 2005

Good Morning,

Monday's sell-off in the Dow closed right on a
supporting trend line. Stochastics have turned over
and are starting to head down. If the Dow trades down
through the recent lows, expect a test of the
50 day moving average. The NASDAQ shows a potential
pullback but no major sell signal.

Be prepared to take some profits on weakness over
the next couple of days.

07/27 - Stock Market Comment - July 27, 2005

Good Morning,

Nothing was indicated Tuesday that would have
confirmed any selling coming into the markets. Although
the Dow sold off a little bit on the close, the rest of the
indexes showed some strength. The market actions
of the past few days of trading now indicate more of
a consolidation period versus any massive selling.

Continue to hold the long positions, taking profits
in positions that have sell signals, and be ready
to move those funds into the new sectors.

07/28 - Stock Market Comment - July 28, 2005

Good Morning,

The scenario remains the same, there does not seem to
be any massive selling in this market. Earnings reports
continue to remain strong. The NASDAQ appears to be
forming a J Hook pattern. The Dow has held up well in
the latest congestion area. Continue to hold the long positions.
The uptrend will remain intact until a severe Candlestick sell
signal is witnessed.

07/29 - Stock Market Comment - July 29, 2005

Good Morning,

The uptrend is still intact. The Dow appears to be
coming up out of a congestion area. The NASDAQ
appears to have formed a J Hook pattern and is in
the process of moving into the next bullish leg.
Continue to hold the long positions.

Crude Oil prices, although moving slightly positive,
could be forming a Head and Shoulders pattern.
Weakness in Crude Oil prices over the next few days
could be the prelude to a big drop in price.

 

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