Daily Market Comments - October 2005
10/03 - Stock Market Comment - Oct. 3, 2005
10/04 - Stock Market Comment - Oct. 4, 2005
As anticipated, the Dow took a little rest on Monday,
consolidating right on the moving average area. As it
pulled back, the NASDAQ moved up to the 50 day
moving average. The uptrend is still intact but we would
expect another day or two of consolidation in the markets.
Crude Oil prices have not shown too much strength
over the last few trading days. Further weakness from
this level would be confirming a Three Mountains pattern,
or in western terminology, a Head and Shoulders pattern.
Continue to hold the long positions while taking profits
on any short positions that are starting to show
10/05 - Stock Market Comment - Oct. 5, 2005
The consolidation of Tuesday was much stronger
than anticipated. It now makes the moving averages
a level of resistance. How this market trades
today will be important. The uptrend requires
the appearance of a Bullish Harami to indicate
that Tuesday's pullback was a pullback in an uptrend
versus a pullback indicating the failure
of the trend at the moving averages. Be prepared
to take some long positions off of the table
if today's trading reveals more weakness.
Crude Oil prices got back to a very critical support level
on Tuesday. The $63 a barrel level has been showing
a very strong support. That level needs to be breached
to the downside to get oil prices to move dramatically
10/06 - Stock Market Comment - Oct. 6, 2005
The reversal signal at the 50 day moving average
of a couple of days ago was reconfirmed Wednesday.
The pullback has now brought prices back down to
the lows of the past four weeks.
Although the futures indicate a stronger open, it should
be anticipated that more selling could come into this market.
The only strength that might come into the market
will be due to the fact that Crude Oil prices are now
breaking the $63 area. This could send Crude Oil prices
down to the $56 area very quickly.
Profits on the long side should have been taken over the
past couple of days and the addition of short positions
should have occurred.
10/07 - Stock Market Comment - Oct. 7, 2005
Some last minute buying Thursday created a Spinning
Top in the Dow. It did so at a trading level where the
markets bottomed out in late June and early July.
Anticipate Friday's trading to be flat to slightly positive
at the end of a big down-week.
Crude Oil prices broke through the $63 support area
on Thursday. Continued weakness in both Crude Oil and
Natural Gas would diminish the argument that huge heating
bills this winter will be taking money out of other parts of the
Continue to hold the short positions but anticipate
some bottoming action in the markets to start over
the next few days of trading.
10/10 - Stock Market Comment - Oct. 10, 2005
The Dow has moved back to a level that indicates
support. It had bottomed out at this level back in
early July. On Friday, the NASDAQ formed a
Bullish Harami. This should have indicated that the
selling had stopped. This morning's futures indicate
positive trading. Be prepared to start buying
with the idea that any new positions should be watched
closely, being ready to sell immediately on seeing failure
of continued buying.
Crude Oil prices appear to be weaker but Natural Gas
prices are probably going to affect the markets
more than Crude Oil prices for the next couple of weeks.
Natural Gas prices showed a strong sell signal this past
week with a Shooting Star being followed by a
gap down in price. Weakness in Natural Gas prices
could add strength to the equity markets.
10/11 - Stock Market Comment - Oct. 11, 2005
The markets are now in the oversold condition. Stochastics
should be trying to curl back up. Start looking for
buy opportunities and taking profits on short positions.
This morning's futures are showing buying strength but
any positions established at this time should be done
with a game plan of coming right back out of them
upon seeing further weakness. Although the markets
are in the condition to try to bottom out, they still need
to see a very strong Candlestick buy signal.
10/12 - Stock Market Comment - Oct. 12, 2005
The NASDAQ did not hold at the 200 day moving average.
However, it experienced a large bearish candle in the
oversold condition. This would be cause us to start
watching for a Candlestick buy signal to form. The Dow
formed an Inverted Hammer Tuesday. It will require
a bullish candle today to indicate a bottom.
As anticipated, the energy components, Natural Gas and
Crude Oil are having a bounce to the upside for a
couple of days.
Continue to hold the short positions but be prepared
to start taking profits on seeing the markets bottoming out
in the next few days.
10/13 - Stock Market Comment - Oct. 13, 2005
The expected congestion area has not appeared.
A downtrend is still in effect. This scenario should have
closed out most of the long positions a few days ago
with the short positions still in place. This natural
occurrence is a result of the Candlestick signals
indicating when the sellers have taken control. The
evidence of the sellers being in control would have
occurred in overbought or newly established positions
on the long side.
Continue to hold the short positions until a definite
buy signal is experienced in both the Dow and the
10/14 - Stock Market Comment - Oct. 14, 2005
10/18 - Stock Market Comment - Oct. 18, 2005
The Morning Star signal in the Dow was confirmed
Monday with additional buying. The S&P 500 also
revealed a confirmed Morning Star signal. The NASDAQ
and the Russell 2000 are just approaching the 200 day
moving average. It would not be unusual to see some
consolidation as those moving averages are tested.
Today's CPI numbers moved the futures just slightly negative.
Anticipate some sloppy trading today.
Crude Oil prices are trading lower pre-market, revealing
the continuation of a slow, downward trading channel.
If purchasing stock today, it does not have to be done
in an aggressive manner.
10/19 - Stock Market Comment - Oct. 19, 2005
The expected rest day Tuesday in the markets turned out
to be stronger, as far as selling, than expected. The
Dow formed a Bearish Engulfing signal, the NASDAQ
just touched the 200 day moving average before backing off.
Now there's a possibility of the indexes coming back down
to test the recent bottom.
Do not plan to buy anything aggressively until the next
buy signal appears.
10/20 - Stock Market Comment - Oct. 20, 2005
The uptrend was obviously still intact with Wednesday's
very bullish trading. Now the NASDAQ has a bullish
signal that is more convincing than the one seen a few days
ago. The 200 day moving average was convincingly breached
and the 50 day moving average should be the next
Crude Oil and Natural Gas prices continue to get weaker.
This is going to start putting a positive sentiment into the
10/21 - Stock Market Comment - Oct. 21, 2005
When the market starts getting into these conditions,
up one day, down the next, the analysis of
the trend becomes nonfunctional. The purpose for
analyzing Candlestick signals is to provide an analysis
for putting the probabilities in one's favor. When that
is not possible, such as we have seen in the past
few days with a strong bullish day followed by just
as strong a bearish day, it is prudent to be closing
doubtful positions and remaining heavier in cash
until a direction can be evaluated.
Crude Oil prices and Natural Gas prices continue to
drop. This should add some positive investor sentiment
to the equity area. However, until a general direction
of the markets can be established, be prepared to sit
for a few days with heavier cash positions.
10/24 - Stock Market Comment - Oct. 24, 2005
10/25 - Stock Market Comment - Oct. 25, 2005
10/27 - Stock Market Comment - Oct. 27, 2005
10/28 - Stock Market Comment - Oct. 28, 2005
10/31 - Stock Market Comment - Oct. 31, 2005