Daily Market Comments - February 2008
2/29 - Stock Market Comments
The Evening Star signal that formed in the Dow on Thursday is influencing more selling today. Lighten up on long positions and add a few short positions on today's weakness. The Dow had the possibility of supporting on the T-Line but today's futures indicate that it will not happen. Long positions should be greatly reduced at least for the next few days.
2/28 - Stock Market Comments
The Dow formed a Doji on Wednesday just above the 50 day moving average. There should be some consolidation soon, but nothing yet to show any major change of investor sentiment. This morning's futures indicate weakness. The uptrend should remain in progress provided no severe selling is witnessed in the markets today. Continue to hold your own position. Notice the farther this market moves higher, the more the term "recession" has disappeared from everyone's analysis.
2/27 - Stock Market Comments
The Dow closed right on the 50 day moving average. This morning's futures indicate some selling. Remember the rule, the first time a trend reaches a moving average, it will usually fail. If it comes back and tests the moving average the second time, it will go through. Anticipate some consolidation today. Unless the selling is dramatically severe, expect today to be a profit-taking day.
2/26 - Stock Market Comments
The strong bullish move on Monday brought the Dow up through the top of the Pennant formation. This would indicate a bias to the upside. Expect some consolidation today. However, a lack of severe selling today would indicate a bullish trend starting to take hold.
2/25 - Stock Market Comments
Friday's trading was the same as the previous seven trading days, moving one way in the morning and ending up in the opposite direction by the end of the day. This kept both the Dow and the Nasdaq in the range of the Pennant formation. Today's futures reveal a lack of direction again. It's the same scenario as all last week, expect sideways movement but be ready for a breakout one way or the other out of the point of the Pennant formation.
2/22 - Stock Market Comments
The markets are demonstrating a definite lack of direction, moving in one direction during the morning and ending in the opposite direction in the afternoon. As discussed in last night's chat room, the Dow is forming a Pennant formation. This means we will probably not see any major movement in the markets until there is a breakout one way or the other. When the markets are in these conditions, there is nothing wrong with sitting and waiting for the signals to provide better guidance.
2/21 - Stock Market Comments
The Dow had a nice turnaround Wednesday after trading much lower, then finishing up 90 points as the Bulls stepped in during the afternoon. The NASDAQ closed right on the T-Line after opening much lower. Today's positive open provides more confirmation that the fear aspect is diminishing dramatically in this market. Stay nimble but buy the strong sectors.
2/20 - Stock Market Comments
Tuesday's failure to hold the morning rally created another Doji in the Dow and another Bearish Engulfing signal in the NASDAQ. Stochastics have now rolled over and are heading down. Today's open will indicate which direction they will be taking the trend of this market. The morning futures are down dramatically. Get out of weak, long positions. A strong selling day in the market will confirm the slow downtrend. Another Doji day in the Dow would at best continued the sideways movement.
2/19 - Stock Market Comments
The indecisive trading of Friday was needed to indicate whether a full scale reversal had occurred or merely some profit-taking during an uptrend. What would have been needed was a positive open today. This morning's futures illustrate a very strong bullish open. Continue to buy the strong sectors. The longer and farther the markets move away from the bottom of January, the less we will hear about the recession.
2/15 - Stock Market Comments
Thursday's selling brought both the Dow and the NASDAQ down to the T-Line with Bearish Engulfing signals. The current uptrend/bounce would be in jeopardy if prices move below the T-Line this morning. The morning futures indicate more weakness. We have recommended being nimble for the past few days, and today would be a good day to exercise that nimbleness.
2/14 - Stock Market Comments
When the market is showing bullish signs and all the experts are professing that the market still has some downside, those are good bullish indications. When everybody says the market is going up, that is when to start watching for sell signals. Wednesday's bullish candle makes the 50 day moving average the next viable target. Stay long until targets are reached or the stochastics indicate to start watching for a sell signal.
2/13 - Stock Market Comments
The Dow showed good strength Tuesday, closing above the T-line. The NASDAQ was very flat. The retail report this morning has added new strength to the uptrend. Stay with the sectors that are showing strength. FSLR reported very strong earnings, which is boosting the whole solar sector.
2/12 - Stock Market Comments
The Dow formed another Hammer signal Monday at the same levels where it has been forming indecisive signals for the past four trading days. The NASDAQ continued slightly higher, closing right at the T-Line. It is very important to see a close above the T-Line. Until it can close above that level, the downtrend is still the dominant force. This morning futures indicate a stronger open. Obviously, we will need to see the continued strength going into the close today. Be ready to buy on the open but also be ready to close out positions if the market closes near the lower end of its trading range today.
2/11 - Stock Market Comments
Although the Dow was negative on Friday, it traded in a somewhat indecisive manner. The NASDAQ actually traded solidly bullish most of the day. The market is currently in a transition stage. Be prepared to buy on the long side but be equally prepared to close out positions immediately upon a lack of follow-through on bullish moves. A new bottom at this level would be very bullish for the markets; a bottom that formed well above the previous lows.
2/8 - Stock Market Comments
On Thursday the Dow had an indecisive trading day. This required a positive open to confirm a short-term bottom. Currently the pre-market futures are showing that the Dow will open with weakness. However, the QQQQ's are trading slightly positive this morning. We may not be at a bottom yet but there are sectors acting well. This morning the transportation stocks appeared to be showing strength. Stay nimble and keep the powder dry.
2/7 - Stock Market Comments
The early buying on Wednesday in the markets required a strong finish. As we saw, selling pushed the market down into the close. The Bearish Harami that formed at the 34 day moving average, with stochastics turning down, is still indicating a downward trend. Continue to hold cash or add to the short positions. We could now possibly see movement past the recent lows.
2/6 - Stock Market Comments
The hard selling on Tuesday indicated the fear of a recession is still prevalent. A pullback was expected after the strong rally from the recent bottoms. However, the magnitude of this pullback indicated the Bulls were not ready to step up at any time during Tuesday's selling. Today's and Thursday's trading will reveal whether this was a pullback in an uptrend or whether the recent lows will be tested. Many long positions were closed out on Tuesday, mainly due to the weaker open versus the strong selling. Until the market trend can be fully identified, sit with cash.
2/5 - Stock Market Comments
More bad economic news this morning is bringing the Bears to the forefront again. This should fuel the expected profit-taking pullback today. Obviously no aggressive buying is required today. If this market closes near the lower end of its trading range, lighten up on long positions. Most of the selling should occur in the first 15 minutes today.
2/4 - Stock Market Comments
After the strong run we saw in the markets last week, expect some profit-taking for the next couple of days. The Asian markets had an extremely strong day today. The Chinese government is apparently working on stimulating their market. Continue to hold long positions. Remain in the sectors that are showing strength across the board.
2/1 - Stock Market Comments
Thursday's market moves provided dramatic information. A day that could have ended the short-term uptrend turned around and showed very strong bullish sentiment. The dynamics that were controlling the downtrend, the thoughts of a recession, are now giving way to the possibility of companies being cheap enough to be taken over by other companies. Continue to hold long positions.