Daily Market Comments - December 2008
12/31 - Stock Market Comments
The past few days have shown the lack of buying and the lack of selling until Tuesday. The strength in Tuesday's trading brought the Dow back up through the 50 day moving average. Although volume is fairly light this week, the candlestick signals reveal a basing process that indicates the upward trend channel being the predominant factor. Continue to hold long positions.
12/30 - Stock Market Comments
The Dow showed an indecisive trading day on Monday. However, it was still trading below the T-line. The NASDAQ showed more weakness than the Dow, but neither index showed any severe selling. The scenario remains the same, look for a lethargic market until after the first of the year.
12/22 - Stock Market Comments
Friday's trading didn't demonstrate any conviction in one direction or the other. The NASDAQ has traded between the T-line and the 50 day moving average for the past few days. The Dow has been trading in a sideways trading channel for the past three weeks. Fortunately, even though the markets are moving somewhat sideways, there have been big profits produced in specific sectors. This is exactly what candlestick analysis is all about, finding the strong price moves.
12/19 - Stock Market Comments
In last night's chat session, it was pointed out that selling had occurred at obvious resistance levels, but the trend was still hard to assess. This was based on what the markets have been demonstrating over the past few months. The whipsaw action of the markets show the lack of conviction in any one direction. Investor sentiment can be influenced by events of the next day. This is occurring again today with the White House stepping in to save the auto industry. Make sure "sell" signals are confirmed before taking profits.
12/18 - Stock Market Comments
Wednesday's selling was merely profit-taking. There was no great conviction or selling pressure. The stochastics still indicate an uptrend is in progress. Today's positive open indicates no great selling sentiment. The NASDAQ is trading right at the 50 day moving average. Continue to hold long positions. However, a bearish day from this level would make the 50 day moving average a more important resistance level for the NASDAQ.
12/17 - Stock Market Comments
The markets liked the Fed rate cut on Tuesday. The strong bullish action moved dramatically through the 50 day moving average on the Dow chart. It also formed a J-Hook pattern. The NASDAQ closed right at the 50 day moving average. Expect some profit-taking today, but as long as it appears likely as only profit-taking, the uptrend should still be in progress.
12/16 - Stock Market Comments
The Dow rallied late in the day on Monday. This kept the bullish prognosis alive as the current pullback was demonstrating indecisive formations. Today's positive open makes the possible breach of the 50 day moving average very viable. Continue to hold stocks in the strong sectors.
12/15 - Stock Market Comments
The strength coming back into the market on Friday afternoon created many Piercing signals in individual stocks. This was an indication that much of a profit-taking of the past few days was probably over. Although today's pre-market futures don't show any great strength, look for the strength to continue in sectors that have been acting strong over the past few weeks.
12/12 - Stock Market Comments
Thursday's sell-off confirmed the 50 day moving average was acting as resistance for the Dow. The lack of confirmation for the auto industry bailout is putting more bearish pressure in the markets. What appeared to be an assumed result from the government is back up in the air. The market doesn't like indecision. Expect some further selling today. There are now rumors the White House will allocate funds to the auto industry. Until something becomes definite, have some short funds back in the portfolio.
12/11 - Stock Market Comments
The positive trading on Wednesday made it evident that the selling of Tuesday was merely profit-taking once the Dow got to the 50 day moving average. Today's early weakness still indicates some consolidation at the 50 day moving average area. The T-line appears to be acting as support. Also, the sectors that have been acting well over the past week or two continue to show good strength. Maintain those positions.
12/10 - Stock Market comments
The expected profit-taking came back into the markets on Tuesday. Although the magnitude of the selling in the Dow seemed excessive, we have to realize the market swings are becoming more exaggerated. However, being in the right sectors on Tuesday still produced very good profits. Today's positive open should be an indication that the profit-taking is over. Stay with the strong sectors.
12/9 - Stock Market Comments
The markets traded higher early in the day and stayed strong most of the day. Today's pre-market weakness should be the result of some profit-taking. The Dow is currently trading right at the 50 day moving average. This area needs to be watched closely. Continue to hold long positions unless a severe sell signal appears in the markets.
12/8 - Stock Market Comments
The Dow went from 275 points negative on Friday to 275 points positive on the close. This kept the trading range of the markets in a very indecisive status. However, with a positive open today, there is a good possibility of breaching the upside channel. There are many long positions that have acted well during this indecisive trading period of the past few weeks. Continue to add to long positions, especially if they breach the upside channel .
12/5 - Stock Market Comments
Thursday's late afternoon selling was probably in anticipation of today's job report. That put the markets smack dab back in the middle of their trading ranges with absolutely no direction. This morning's weakness in the futures will confirm Thursday's little bearish signal in the Dow right at the T-line. Now the lower end of the trend channel becomes a viable target. As you can see from the recommended list, we are predominately in cash. This is an inherent result of the simple mechanical closing of positions in a sideways market. Any trading today should be oriented toward the short funds but still with a sense of nimbleness.
12/4 - Stock Market Comments
The Dow, closing up 175 points on Wednesday, after being down 175 points during the day was good confirmation for the Bullish Harami. It made the probabilities of a re-test of the 34 day moving average highly likely. However, today's substantial bearish indication of the pre-market futures will once again require a positive close this afternoon. A negative close will produce more evidence of the sideways meandering market trend. Until the trend channel can be broken to the upside or the downside, any trading has to be done with a very short time frame in mind. Fortunately, price moves in these dramatically lower market conditions are still producing extremely good returns. Remain nimble.
12/3 - Stock Market Comments
A Bullish Harami formed in the Dow on Tuesday. It closed right on the T-line. To indicate that Monday's trading was merely a pullback in an uptrend, today's open should have confirmed the Bullish Harami of Tuesday. The weakness in today's pre-market futures reveal better probabilities that Monday's selling occurred at the top of the trend channel. If the markets close weak today, anticipate another test of the recent lows. Be prepared to add short funds to your portfolio.
12/1 - Stock Market Comments
The Friday after Thanksgiving is usually a very lackluster day. However, it showed decent strength. Expect some profit-taking on Monday. This is being indicated by the lower pre-market futures. Continue to hold long positions but we would not add any new long positions until we see the end of the profit-taking and new strength coming back into the markets. This could be today or the next couple of days. Anticipate a test back to the T-line. Remain nimble.