Daily Market Comments - March 2008
3/31 - Stock Market Comments
The weakness of Friday's trading indicated the moving averages were not going to act as support. This is seen with further weakness this morning. The markets had the opportunity to form J-Hook patterns last week but now reveal that the Bulls are not ready to reestablish control. Anticipate a sideways or slow downtrend type movement in this market until something major breaks it out of its pattern one way or the other.
3/28 - Stock Market Comments
All the indexes pulled back on Thursday to potential support levels, the various moving averages. We need to see positive trading today, such as Bullish Harami's, to indicate that those moving averages are going to act as support. The bias is still "long" provided you don't see any severe selling in the markets today.
3/27 - Stock Market Comments
Wednesday's trading indicated profit-taking for the day. This morning's futures are showing strength in the Dow and the S&P 500. The NASDAQ is showing less strength due to Oracle's weakness this morning. The bias is still bullish. Continue to hold long positions in the strong sectors.
3/26 - Stock Market Comments
The initial weakness today is the expected profit-taking after a strong market move. The Dow and the NASDAQ should attempt to use the 50 day moving average as support. Continue to stay long but we would not suggest being an aggressive buyer today. However, there are still stocks showing good chart patterns that can be bought.
3/24 - Stock Market Comments
A Stick Sandwich pattern formed in the Dow on Thursday. This is a very bullish signal. It illustrates bullish sentiment from the 420 point move in the Dow, profit-taking the next day, and followed by the Bulls entering back into the market on Friday. The Dow closed above the 50 day moving average on Thursday. Today's positive futures confirm the bullishness in both the Dow and the NASDAQ. The combination of bullish signals over the past two weeks, the Kicker signal and the Morning Star signal in the NASDAQ and the large Bullish Engulfing signals in the Dow, provided the evidence the Bulls were attempting to take control of the trend. Start buying long positions as long as the Dow remains above the 50 day moving average.
3/20 - Stock Market Comments
The severe selling of Wednesday put doubt back into the market trend. The 300 point move to the downside in the Dow closed more than halfway down the previous candle, as well as below the T-line. Once again, today's trading results are required to get a gauge on investor sentiment. Currently the markets are not telling us which direction it wants to move. Be nimble and stay predominantly in cash if you can. Today, we could see positive trading going into the long weekend. This is only one of two long weekends for the year.
3/19 - Stock Market Comments
The farther the markets move away from the recent lows, the less we hear the talk of recession. The less we hear about the talk of recession, the better the prospects of investor sentiment turning more bullish. This catch-22 clearly indicates how markets/prices are a function of investor sentiment versus fundamental facts. If the Dow can start using the 50 day moving average as support, versus resistance, the better the chances are that the uptrend should continue.
3/18 - Stock Market Comments
The Dow and the NASDAQ are still in the bottoming stages. Today's positive open requires confirmation going into the close. As we have witnessed for the past few weeks, the markets have been able to swing dramatically intraday. Any buying done today should be done so with the idea of closing the positions if the market turns negative by the end of the day.
3/17 - Stock Market Comments
The Dow and Nasdaq futures are down big pre-market. The Bear Stearns news is shaking the market. Last night, the Feds approved another rate cut. The Asian markets were down substantially today. Prices should gap down today after the market opens. This will be the time to start watching for a capitulation bottom. It may not be today, but it could be within the next day or two. The weakness of the dollar will now become the Feds next concern. Any indication to support the dollar would reverse crude oil's uptrend as well as many other commodities that are in an uptrend. Keep the powder dry and remain nimble. Bottoming action has already started in the markets. Watch for the next buy opportunities.
3/14 - Stock Market Comments
Do you believe that inflation is flat? It doesn't matter! The market in general liked what they heard. Thursday's big reversal, after bad economic news, revealed that the Bulls were still in control of this market. There is something else out there that they were considering as more important than the retail news of Thursday. Do what the market is telling you to do. Currently, the signals are illustrating a bullish reversal. That should be the overriding factor until a sell signal appears.
3/13 - Stock Market Comments
On Wednesday the markets formed Shooting Star/Doji formations, closing at a lower end of their trading ranges. This was after a full day of trading at higher levels. The bullish trend required a positive open today. The morning futures indicate a very weak open. The bottoming action is not over. No long positions need to be established today until the markets indicate some strength, meaning trading activity back up toward the top end of today's trading range before the end of the day.
3/12 - Stock Market Comments
After a huge move in the markets, it isn't unusual to see some consolidation. There should be some sectors that will maintain strength after this big change of market direction. It appears as if the solar companies may be continuing their initial reversal move of Tuesday. Many bank stocks should continue their positive move after the Feds program for making it easier for them to lend money.
3/11 - Stock Market Comments
The Feds moved! The morning futures are up very strong. Shorts should be covered immediately. Then watch to see if the initial buying holds today.
3/10 - Stock Market Comments
The strong selling on Friday indicated that neither the Dow nor the NASDAQ was going to maintain the bottom support level. The markets are now trading in the lower tails of the bottoming days of January. The stochastics are now in the oversold area. The downward bias is still the predominant trend. However, major market bottoms usually have a second bottom attempt. The next few days should be spent watching for a candlestick buy signal at these levels. This is just watching! The bullish bias will not be the predominant trend until a major buy signal is formed in this area. This may be caused by something the Feds do.
3/7 - Stock Market Comments
The weaker jobs report puts us closer to a statistical recession. The morning futures indicate trading below the support level. Anticipate a test of the January lows provided there is not a surprise rate cut by the Feds. Many stocks are now getting into the oversold condition. However, no buying should be done until a definite buy signal appears in this market. That could be today or two months from now.
3/6 - Stock Market Comments
Both the Dow and the NASDAQ showed strength going into the close on Wednesday. The Spinning Top type trading day indicated there was no severe selling pressure in the markets. The futures are indicating a lower open today. This reveals that the bottoming action still needs to be confirmed. Remain nimble. The stochastics still need to get into the oversold condition before a strong uptrend can be expected.
3/5 - Stock Market Comments
The Dow sold off hard on Tuesday but the fact that it closed at the very top end of its trading range was significant information. It formed a Hammer signal. The NASDAQ closed slightly positive after trading much lower. Both indexes seemed to keep the integrity of the sideways moving channel. Today's positive open would be more indication that the trading channel will remain intact. The sideways movement of this market requires getting in and out of positions relatively quickly.
3/4 - Stock Market Comments
Today's weakness in the futures dropped both the Dow and the NASDAQ well below the lower channel support area. Bernanke is talking right now. A surprise rate cut by the Feds could dramatically change the current trend of this market. Without it, leg three of a downtrending market may be starting. Short positions should be the predominant bias of the portfolio.
3/3 - Stock Market Comments
Friday's selling brought both the Dow and the NASDAQ back down to the lower end of their Pennant formations. To keep from reaching that lower level, a bullish open was required today with the possibility of forming a Bullish Harami. Today's futures are indicating further weakness. On Friday, the NASDAQ gapped down after a Bearish Harami on Thursday. That bearish signal is being confirmed today. Expect more downside to this market. That is, providing there is no surprise rate cut by the Fed.