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Daily Market Comments - January 2009

1/30 - Stock Market Comments

Thursday's selling was much more aggressive than merely profit-taking. Both the Dow and the NASDAQ gave up more than what they had gained the previous day. This will put a damper on the bullish mood in the market. Bullish confirmation now requires today's trading to close more than halfway up Thursday's candle body. However, there are still sectors that are performing very well on the long side.

1/29 - Stock Market Comments

Today's premarket futures are down because of the declining jobs report. However, this was not a surprise. After for good positive days in the market, a pullback is not unexpected. Expect some profit-taking today that should move the Dow back down to test the T-line and the NASDAQ back down to test the 20 day moving average. The magnitude of the selling will be better assessed at the end of the day. If the markets close near the lower end of their trading ranges, the uptrend will slow down dramatically. A close near the top end of the trading range would continue to make the next resistance levels above the current trading the viable targets.

1/27 - Stock Market comments

The Dow and the NASDAQ showed good strength on Monday but most of it faded going into the close. This formed indecisive signals closing just below the T-line. This morning's trading is showing continued strength but there is nothing yet that would indicate that a powerful reversal is in effect. Continue to stay long but always remain nimble until there is a solid bullish confirmation. With the markets not showing any severe selling, this is allowing bullish candlestick signals to work very well in individual stocks. The strong sectors continue to act strong.

1/23 - Stock Market Comments

The Japanese rice traders are very specific about the formation of a candlestick signal. On Thursday the Dow 'almost' formed a Hammer signal. The term 'almost' is very important. The Bullish Harami was not confirmed. Thursday's trading didn't quite form a Hammer signal. Today's trading obviously demonstrates the lack of confirmed candlestick signals. Once again, it has to be assumed that the downtrend is still in progress until a candlestick buy signal is confirmed.

1/22 - Stock Market Comments

Today is a perfect day to illustrate why a candlestick signal requires confirmation. Wednesday's Bullish Harami was a good indication that the selling had stopped. It required bullish confirmation today. The Dow needs to close positive and above the T-line today to confirm Wednesday's signal. A close more than halfway down Wednesday's candles would add more reason to have short funds in the portfolio.

1/21 - Stock Market Comments

Premarket futures are showing a positive open today after the hard selling of Tuesday. This is not unexpected due to the fact that the sellers came in hard during the final hour on Tuesday. Tuesday's selling negated the potential reversal signals of last Thursday and Friday, two indecisive trading days. The downtrend is still in progress until a strong observable reversal signal occurs. Stochastics are in the oversold condition. However, the November lows could still be a viable target. Do not rush into any long positions without the intention of taking profits upon seeing weakness coming back into the market.

1/20 - Stock Market Comments

Whether Republican or Democrat, whatever hopes and aspirations one may have for a new president, the markets will usually indicate what investors think that new president will be able to do, usually in the first two or three weeks after he is sworn in. The strength came into the markets on Friday, bringing the indexes back up into the sideways trading range. 72% of the time the market will sell off on Inauguration Day. Continue to watch what type of candlestick formation occurs at this level. The NASDAQ just nudged the 50 day moving average on Friday. A failure to move through that level in  the next day or so would have strong bearish implications. Further weakness would make the November lows the next viable target for the Dow. The Bulls need to see an indecisive trading day today to maintain any bullish prospects.

1/15 - Stock Market Comments

On Wednesday the selling broke through the lower trend channel in both the Dow and the NASDAQ. Stochastics are now in the oversold area. Currently, there is no indication of any buying coming into this market. The only long positions that should be held at this time are those that have not shown any confirmed sell signals. Utilize the short funds to offset the downside. Investor sentiment continues in a bearish bias. A dramatic reversal signal is required to counter the downtrend.

1/14 - Stock Market comments

Both the Dow and the NASDAQ formed Doji signals on Tuesday near the bottom of their trend channels. This provided the prospect of the trend channels acting as support. However, today's premarket futures indicate a breach of the lower trend line. If today's trading opens lower and continues to trade lower, add some short funds to the portfolio. The trend channel will now only remain in effect if the indexes open lower today and close back up above Tuesday's close. A close below the trend channel today would put a bearish tone to the markets.

1/13 - Stock Market Comments

Monday's weakness in the markets brought both the Dow and the NASDAQ down to their lower trend channels. This expected pullback to this area should have reduced open positions on the long side. Today's trading should reveal whether the bottom of the trend channel will act as support. A breach of this area would warrant adding short funds back to the portfolio. An indecisive trading day would give the lower trend channel the appearance of acting as support.

1/12 - Stock Market Comments

The weakness in the markets on Friday continued to move the Dow and the NASDAQ back into the middle of the trading channel of the past few months. This indecisive nature of the market is probably a reflection of investors not having a handle on which way government actions are going to occur. Until the government sponsored programs become more clearly defined, this market should remain in a fairly indecisive stage. This still allows for pinpointing the strong sectors and taking advantage of those moves.

1/9 - Stock Market Comments

The markets stayed relatively stable on Thursday. Although the Dow was still negative on the close, the NASDAQ was up nicely. This indicated there was not any great fear of the employment numbers this morning. Those numbers, although bad, were not as bad as expectations. Continue to hold long positions in strong sectors. The sideways moving trend channel should be the major indicator over the next few trading days.

1/8 - Stock Market Comments

The selling in the markets on Wednesday was done with the magnitude that clearly indicated the upper trendline was not going to be breached. The Dow moved back toward the 50 day moving average. The NASDAQ gapped down and closed right at the T-line. This puts both indexes back in the mid-range of a slow uptrending trend channel. Stochastics started rolling over. Anticipate at least a day or two of further softness. Watch the 50 day moving average in both indexes. Do not be afraid to take some more profits on weakness this morning.

1/7 - Stock Market Comments

The Dow tried to push through the top of its trading channel on Tuesday. The closing hour gave back some of the gains. This morning's futures indicate more weakness. A lower close today would add more evidence that the upper trend channel continues to act as resistance. There have been many price moves in individual stocks that have created some very large gains. Don't hesitate to take some profits. A number of the shipping stocks formed Doji signals on Tuesday. Expect profit-taking in some of the strong sectors. 

1/6 - Stock Market Comments

Monday's trading illustrated profit-taking action. This could be evaluated based on the fact that the weakness in the Dow was not confirmed by any great weakness in the NASDAQ. The strong sectors continued to show strength. This morning's premarket futures indicate the Bulls may make another attempt  to break out through the upper resistance level. Continue to hold the strong sectors.

1/5 - Stock Market Comments

The first day back after the holidays will usually provide a window of which stocks/sectors are going to perform the best coming out of the chute. Using candlestick signals, it will be easy to identify where the big money is putting their funds. The strong finish of Friday should instigate some initial profit-taking this morning. Once the profit-taking is over, begin watching for which buy signals are starting to confirm.


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