Daily Market Comments - February 2009
2/27 - Stock Market Comments
The markets had the potential of going positive on Thursday but both the Dow and the NASDAQ failed at the T-line. The weakness on the close on Thursday is now being followed by more premarket futures weakness. Watch for a gap down in the indexes. This could possibly eventually result in a bullish signal. Add short funds to the portfolio, but be nimble. We are still in oversold conditions.
2/26 - Stock Market Comments
The trend will move in the direction of how it opens after a Doji. Wednesday's trading and the NASDAQ formed a Doji. Today's premarket futures showing good strength would make for buying on the open. A close above the T-line today would be extremely bullish. Be a buyer.
2/25 - Stock Market Comments
There is a strong Bullish Harami in both the Dow and the NASDAQ, which should create at least a temporary bottom. As the strength became obvious on Tuesday, with no real selling for most of the day, it was the time to start covering some of the short positions. Today's trading needs to demonstrate follow-through bullish sentiment. Although the pre-market futures show slight selling on the open, it is not of any magnitude that wouldn't be expected after a strong day in the market. The banking stocks are picking up strength.
2/24 - Stock Market Comments
Both the Dow and the NASDAQ are in the oversold conditions. However this does not mean anything until it can be identified that there has been a change of investor sentiment. A downtrend can remain in the oversold condition for many weeks or months. The conditions of the stochastics simply indicate a condition that would be more conducive to be watching for a candlestick buy signal. Candlestick reversal signals will be evident in the market indexes themselves as well as in the short funds. Until those signals appear, consider the downtrend as being in progress. Just be more diligent in anticipating a reversal signal when everything is in the oversold condition.
2/23 - Stock Market Comments
The Dow almost formed a Hammer signal on Friday. The NASDAQ opened lower and closed almost unchanged, forming a Meeting Line signal. The positive futures this morning gives some evidence to bottoming action at these levels. Be prepared to cover some short positions and add long positions. However, be nimble, the downtrend is still in progress until the T-line can be breached.
2/19 - Stock Market Comments
Economic news has moved the pre-market futures well into positive territory. A positive open after Wednesday's Doji in the Dow should make for some quick trades on the long side. However, the downtrend needs to be considered until there is a close above the T-line. Long positions established today require strength going into the close. Be nimble, this is a trading market versus a trending market.
2/18 - Stock Market Comments
After breaching the trend channel support level, the Dow moved down toward the next viable target, the November lows. Surprisingly, the Dow closed within 3/10 of a point of the November lows. This morning, the pre-market futures are indicating a positive open. Any trading today needs to be executed with the thought in mind that we are in a downtrend until we witness a candlestick buy signal and a close above the T-line. Maintain positions in the short funds unless today's trading turns into a rip roaring bullish market.
2/17 - Stock Market Comments
The weakness in the Dow on Friday closed that index right on a support level. Today's pre-market futures indicate a dramatic breach of that support level. The NASDAQ appears to be opening well below its trend channel. Be prepared to add short funds to the portfolio immediately and maintain those positions until we see a dramatic reversal day. The Dow has not been able to support a rally above the T-line since the first week of January. The downtrend is still in progress until a confirmed buy signal is followed by a close above the T-line. A weak close today could be the start of a third wave to the downside.
2/13 - Stock Market Comments
The market recovery on Thursday formed a strong Doji/Hammer signal in the Dow. The Nasdaq formed a Bullish Engulfing signal right on important moving averages. Today's current selling should be looked at as some profit-taking from that reaction. The markets are currently trading back in the trading channel. Severe selling today would once again breach the lower trend channel. Remain nimble but be prepared to buy aggressively if the indexes go positive today.
2/12 - Stock Market Comments
Although the markets traded positive on Wednesday, they did nothing to change the current sideways mode of this market. The Dow failed at the 20 day moving average. The NASDAQ's slow uptrend is now being threatened with it trading at the lower end of its trend channel. Currently there are no indications on the daily chart, weekly chart, or monthly chart that would indicate a change in the overall slow bearish downtrend. If today's trading moves the Dow below its current support level, anticipate more downside, likely a test of the November lows. A strong buy signal is required to change the lethargic investor sentiment. Remain nimble.
2/11 - Stock Market Comments
Tuesday's severe selling indicates the significance put on the expectations of the stimulus program. The disappointment on Tuesday stems from the lack of anybody knowing what the program has been or is going to be. Until a government official can clearly explain the rationale of the allocation of the stimulus money, investors are going to be wary. The Dow is in a sideways trading channel. The NASDAQ might be heading back down to test the lower trend line. Be prepared to buy into the short funds again if the markets shows moral weakness today. That would mean current support levels have been breached.
2/10 - Stock Market Comments
Both the Dow and the NASDAQ consolidated on Monday, which wasn't unexpected after two strong days prior. However, the markets may be in a "wait and see" mode until something is resolved with the stimulus package. Banking stocks continue to pick up strength. Oil stocks and mining stocks are acting well also. The strong sectors will continue to perform well provided the market indexes do not suddenly show severe selling.
2/9 - Stock Market Comments
The bullish trading on Friday brought both the Dow and the NASDAQ up well above any resistance levels. This was expected after the bottoming action of the past week. Investor sentiment is still being dictated by the actions of the stimulus package. Expect some oscillations in the market based upon when and how the stimulus package gets passed. The banking stocks showed extremely strong buys signals on Friday. Add some long positions in that sector.
2/6 - Stock Market Comments
The stimulus package should help the economy, maybe not the way this stimulus package is formulated, which is being evaluated by the market as positive but not rip roaring positive. However, if the markets can maintain a slow rising or flat trading progress, it will allow for taking advantage of specific sectors that can be identified by candlestick signals. Currently the mining stocks, oils, healthcare and medical supplies are doing well. Take advantage of the information that the candlestick signals pinpoint where the money is moving. Anticipate a slow uptrending/sideways trend channel until something is resolved with the stimulus package.
2/4 - Stock Market Comments
Monday's trading showed indecision at a potential support level. Tuesday's trading confirmed That the support level was going to hold. The Dow closed fairly close to the T-line and the NASDAQ closed above the T-line and right on the 50 day moving average. Obviously the market is showing a very choppy environment. This warrants being prepared for very short-term trades until an overall trend can be identified. These market conditions make trading the patterns a much better risk/reward factor.
2/3 - Stock Market Comments
The indecisive trading of the Dow on Monday occurred at a possible support level. Today's positive premarket futures lends itself for a possible bounce off this level. However, stochastics still indicate more downside potential. Any buying in today's market should be done with the idea of closing out those positions if the market goes negative before the end of the day. This market needs to close up strong to show that the lower end of the trend channel has acted as support.