Daily Market Comments - September 2008
9/30 - Stock Market Comments
Although the morning futures are positive, getting back some of the market's decline of the final few minutes of trading on Monday, be careful of any further weakness from here. Keep in mind, the Dumpling Top which has formed in the Dow usually represents a strong downdraft in a market. Continue to keep the cash reserves. The opportunities will present themselves.
9/29 - Stock Market Comments
After all the hoopla of getting a mortgage resolution agreement resolved, investors are obviously viewing the results with a less than enthusiastic initiation this morning. The Dow formed a Morning Star signal this past week. There was bullish affirmation on Friday in anticipation of a package that would be considered good stimulus. The less than enthusiastic sentiment this morning continues to put the market trend in a non-decisive sideways mode. This can only change with another bullish confirmation today of the Morning Star signal of last week.
9/26 - Stock Market Comments
What was definite on Thursday afternoon is nothing today. There is no deal yet in Washington. There is no way to project what the market is going to do. If that is the case, you are not at any advantage putting your money into the markets one way or the other. Sit back and wait until there is a definite direction.
9/25 - Stock Market Comments
Watching the hearings on Wednesday gave a good impression that a bailout package was still not very near to completion. This instigated the selling going into the close. Today's trading will be predicated on what Wall Street anticipates as the length of time to get a bailout package approved. This continues to put the market trend in a very questionable status. Until a definite direction can be assessed, remain in cash as much as you can.
9/24 - Stock Market Comments
The Dow and the NASDAQ have given back most of the gains that they made during the two-day surge. This revealed continued indecision in the market trend. This condition should remain until something is decided about the mortgage bailout. Although there are some positions that are making money ,the opportunities remain very small. If you have been sitting with cash most of the summer, it will not hurt to sit with cash for a few more weeks until something is resolved in the market trend. This may seem wishy-washy, but when the probabilities of being in the right direction at the right time cannot be clearly deciphered, why expose funds to lower probability situations?
9/22 - Stock Market Comments
The Dow closed right at the 50 day moving average, up approximately 800 points from two trading days ago. A close above the 50 day moving average will be important. Obviously, investor sentiment has gone through a wild oscillation last week. When markets vacillate this much, each day requires more than normal diligence. Continue to hold long positions and be ready to pull the trigger at any time.
9/19 - Stock Market Comments
The last few days of trading is a pure example that prices move based on investor sentiment, not fundamentals. Obviously, short positions should be covered ASAP if you have any. Traders should be ready to buy strong charts on the open but be extremely careful before the end of the day.
9/18 - Stock Market Comments
The Dumpling Top that has formed in the Dow over the past two months definitely saw confirmation on Wednesday. Both the Dow and the NASDAQ closed below the lows of July. Stochastics indicate more potential downside. Continue to hold short funds. Any long positions should only be held if they are producing very compelling charts.
9/17 - Stock Market Comments
Although the markets showed strength on Tuesday, it is very evident there is not a bullish or bearish conviction to this market. The Dow is in the process of forming a Dumpling Top. A break down below recent lows could start a very strong bearish trend. When the markets are displaying this much uncertainty, there is no advantage being displayed on the charts one way or the other. Keep your cash position heavy until a direction becomes clear.
9/16 - Stock Market Comments
When you wake up and you find the morning futures down dramatically because of a specific event, only one thing can be assessed. Investor sentiment has had a dramatic change. As mentioned last week, having a few short funds in the portfolio would be a good safety hedge. When the markets are not performing as expected, sit out for a while.
9/12 - Stock Market Comments
Thursday's positive trading going into the close created a second Morning Star signal in the Dow. This created the potential again for a bullish rally to start. At worst, it indicated the sideways mode of this market was still in progress. Today's premarket futures indicate weakness. This is not what is needed to instigate a positive trend. Unfortunately, it reveals that investor sentiment is still not biased one way or the other. Expect more sideways action. A bullish trend needs confirmation, which would be a strong close today. Remain nimble. There are specific stocks working well in the sideways market.
9/11 - Stock Market Comments
The positive trading on Wednesday was not significant enough to alter the negation of the Morning Star signal a few days ago in the Dow. The other indexes formed Harami's that had the potential of stopping the downtrend. This morning's futures indicate continued weakness in the markets after the employment numbers came out. This continues to make the market lows of the recent past few months the next likely target. We are in a downtrend unless this market creates a strong rally before the end of the day.
9/10 - Stock Market Comments
The huge selling of Tuesday negated the effect of the Morning Star signal at the end of the flat trading period in the Dow. The other indexes showed weak trading that indicated more downside potential. Unless there is a big up-day today, creating a Stick Sandwich signal, the markets should be testing lower support levels.
9/9 - Stock Market Comments
The strong close in the markets on Monday created a Morning Star signal in the Dow. A Morning Star signal after a relatively flat trading period is usually a prelude to some more bullish action. A couple of more days of positive trading would put the Dow back up into the mid-range of the trading channel of the past two months. This should be a bullish indicator until the market closes more than halfway down Monday's bullish candle.
9/8 - Stock Market Comments
The weekend events related to the takeover of FNM and FRE are creating a huge rally in today's futures. A strong bullish day would bring the Dow back into the trading channel with a big Morning Star signal. This requires a strong close today. The financial sector should still be bought.
9/5 - Stock Market Comments
The hard selling of Thursday breached the lower side of the trading channel the Dow formed over the past two months. The first week after Labor Day, when everybody is back from summer vacation, is when the market direction is usually illustrated. The hard selling reveals there is no bullish sentiment. A test of recent lows is the high probability prognosis.
9/3 - Stock Market Comments
Tuesday's market failure, after a strong open, continued the scenario of a sideways moving market. Crude oil prices dropped back below the 200 day moving average on a significant sell-off. This should have been a stimulus for the bullish sentiment. The same nimbleness recommended during the past two months still needs to be addressed. The financial stocks continue to show strength across-the-board. Additional stimulus, such as indications that the financial crisis is over, may be needed to break this market to the upside.
9/2 - Stock Market Comments
The market sell-off on Friday was apparently for fear of what Gustav might do to the oil fields. Today's pre-market strength shows the relief that the hurricane was not as severe as expected. Crude oil prices are down below the 200 day moving average. This should be the stimulus for allowing the markets to test the upper end of the trend channel. Watch for continued strength in the financial stocks.