Daily Market Comments - November 2008
11/26 - Stock Market Comments
Both the Dow and the NASDAQ formed Spinning Tops on Tuesday. Today's pre-market futures indicate a lower open. Look for another test of the T-line. Expect any trading to come to an end around lunchtime. All the major traders are headed for the Thanksgiving vacation.
11/25 - Stock Market Comments
The Dow needed bullish confirmation after the Bullish Engulfing signal on Friday. Monday's trading provided the confirmation. The bullish trading brought the Dow and the NASDAQ well above the T-line. The pre-market futures are indicating more bullish trading. Expect some profit-taking very soon but the fact that the Bulls are still participating heavily diminishes the negative investor sentiment that has been controlling this market. Continue to add long positions and expect some profit-taking.
11/24 - Stock Market Comments
The Dow formed a Bullish Engulfing signal on Friday. Today's pre-market futures indicate continued buying. The first obstacle for both the Dow and the NASDAQ will be getting through the T-line. Be prepared to take profits on short positions and short funds. But any long positions purchased today need to be watched diligently as the markets approach the T-line. Until there is a definite close above that level, the general market trend still has to be evaluated as a downtrend. This might mean any short positions closed out today could be re-opened in the next day or so. Buy some long positions but be nimble.
11/21 - Stock Market Comments
The hard selling on the close on Thursday brought the Dow down below the recent support level. The NASDAQ closed in new lower territory. Thursday's selling had the indications of forced liquidations. This morning's futures show a positive open. This should be the result of recovering some of the excessive selling from Thursday as well as seeing strength in the Asian markets. Consider the markets in a downtrend until a strong candlestick buy signal appears and a close above the T-line is witnessed.
11/20 - Stock Market Comments
Applying candlestick signals to trends makes the analysis very easy to visualize. Simple rules help distinguish whether a trend is still moving in the current direction when counter trading days occur. It has been easy to project the downtrend remaining in progress with the absence of a candlestick buy signal and a close above the T-line. These indicators work extremely effectively for analyzing market index trends as well as individual stock and commodity trends. Consider the downtrend in effect until a breach of the T-line has occurred following a candlestick buy signal.
11/19 - Stock Market Comments
Both the Dow and the NASDAQ formed bullish signals just today. The NASDAQ formed a Doji/Hammer signal. The Dow formed a Bullish Harami signal at the recent support level. Today's trading requires bullish confirmation of those signals, a positive trading day. Be ready to close out short positions and add long positions. Once again, this market may be trading in a sideways channel. This requires shifting portfolio direction fairly quickly as the top and bottom of the channel is reached.
11/18 - Stock Market Comments
The Dow closed back at the same level where the big bullish candle opened last Thursday. This obviously negated any bullish indications Thursday's trading might have revealed. The NASDAQ closed at recent lows on Monday. Today's slightly positive premarket futures are the result of Hewlett-Packard reporting better-than-expected earnings. Until a strong bullish signal is witnessed, followed by confirmation, the current downtrend is the predominant trend. Maintain short fund positions. Any long positions put into the portfolio should have extremely strong buy signals.
11/14 - Stock Market Comments
The massive reversal on Thursday occurred at the same levels where the Dow had bottomed twice before in the past month and a half. The NASDAQ also bottomed in this area a few weeks back. More than likely, there will be some early profit-taking due to the magnitude of the reversal. This will mean that the buying needs to return before the end of the day to confirm the Bullish Engulfing signal of Thursday. This doesn't mean the market needs to close positive today, but it should close near the high end of the trading range, forming a Hammer type signal. The markets should not close more than halfway down Thursday's candle. This would negate the positive move of Thursday.
11/12 - Stock Market Comments
With the Dow opening lower on Tuesday after the Spinning Top/Doji near the T-line, it was the obvious sign the market was heading lower, which it did. The conditions of the stochastics imply further downside for at least the next two or three days. That makes it very viable for a re-test of the recent lows. Portfolios should remain oriented toward the short side. Any long positions need to be watched with great diligence, and closed out on any signs of weakness. Until there is clarity about what the government is going to do about if and how they are funding ailing industries ,this market will not have any reason to stimulate the Bulls.
11/11 - Stock Market Comments
After the strong open yesterday, reaction to the news that the China government was going to put $600 billion back into their economy for stimulation, the Bears were still taking control later in the day. The Dow closed back below the T. line. The NASDAQ did a bearish engulfing signal. Stochastics are still in a downward direction. Today's weak open continues the downside trajectory. For the next few days, be oriented toward the short side. Any speculation on which direction the market will go after that is futile to these market conditions.
11/10 - Stock Market Comments
The positive trading on Friday formed a Bullish Harami in both the Dow and the NASDAQ. It was either a bounce in a downtrend or indicated the downtrend has stopped. What is required is additional bullish confirmation today. So far, the premarket futures are illustrating very strong bullish confirmation. Long positions can be bought today but until a definite direction can be established in these markets, do so with the idea of closing positions immediately if the bullish sentiment does not persist going into the close.
11/7 - Stock Market Comments
The selling strength was just as strong on Thursday as it was on Wednesday. this clearly revealed confirmation of the sell signals formed on Wednesday. Friday's trading, being the end of the week could see some mild recovery of the past two days but the sell signals and the stochastics both indicate more downside. Add some short funds to the portfolio. Be oriented toward the short side until a confirmed buy signal appears.
11/6 -Stock Market Comments
The expected profit-taking came yesterday but with a much bigger enthusiam that expected. The selling created the closing of a few of our portfolio positions. The continued selling appears in the premarket futures today. Take profits on charts that are in the over bought area and producing sell signals. Any purchases of the short funds at these levels need to implemented with anticipation of the likely hood of a quick profit taking session, a day or two, but there is no evidence yet to suggest the DOW is going to support at the 20 day MA. The lack of buying on the open today reveals the potential of a slow sideways market condition AGAIN.