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Daily Market Comments - March 2009

3/30 - Stock Market Comments

Friday's trading made a pullback to the 50 day moving average and the T-line a very viable probability. However, it was not anticipated that it would do it in one fell swoop on the open today. The Dow is currently trading right at the 50 day moving average. The NASDAQ opened right on the T-line. How the market closes today will be extremely important. If the markets hold at these levels and start moving back up, that will be an important indication that the support levels are going to hold. Weakness going into the close would make Friday's sell signals confirm with a gap down. Fibonacci retracement numbers would then come into play. 

3/27 - Stock Market Comments

The pre-market futures are showing weakness this morning, which is not unexpected after a strong week. Expect some backing and filling this morning but the overall market trend will remain bullish until we see a dramatic sell signal. Today may require just sitting and holding until we see what the afternoon brings. Aggressive buyers should look to be buying on pullbacks.     

3/25 - Stock Market Comments

The markets showed profit-taking on Tuesday as expected. However, there were not any signals showing a change of investor sentiment. The bullish uptrend remains intact as long as the Dow closes above the 50 day moving average and at worst the T-line. The NASDAQ needs to stay above the T-line now that it has crossed up through the 50 day moving average. It is now becoming much more obvious the uptrend is backing and filling as it progresses upwards. Continue to stay long until a reversal signal  is confirmed with a close below the T-line. The same is true with the strong sectors such as the financials.

3/24 - Stock Market Comments

Obviously, expect profit-taking today. A 500 point move in the Dow continues to move these markets away from their recent lows. Is this a bounce or a full-fledged reversal these past few weeks? That is still what is hanging out over the market. However, it has produced 25%, 50%, 80% and more in profit moves over the past three weeks. Today's action should be profit-taking. Severe selling, closing more than halfway down Monday's candle would indicate the bounce is over. 

3/23 - Stock Market Comments

The term "be nimble" definitely applies in a market where outside influences can change the investor sentiment from one day to the next. Today's announcements about how they are structuring the toxic loans have completely reversed the investor sentiment in the financial area. Pullbacks to specific support areas now imply the profit-taking was merely profit-taking and the new buying in the financial stocks is starting the next leg up. Buy BAC and FAS. The rest of the market should be picking up strength in light of the financials receiving help from the government, which has been anticipated for the past four months.

3/20 - Stock Market Comments

The markets consolidated on Thursday and didn't showing any severe selling indications. Today's premarket futures also reveal a lack of any selling pressure. With today being an options expiration day, anticipate a waffling type market . Continue to hold long positions unless some severe selling pressure becomes evident. The uptrend may be pausing but it has not come to an end.

3/19 - Stock Market Comments

The uptrend in the markets remains healthy due to the backing and filling each day. This profit-taking during the uptrend usually maintains an uptrend much longer. The Dow is approaching the 50 day moving average. This would be a likely spot for people to start taking profits. Stay long and be nimble.

3/18 - Stock Market Comments

After the strong move in the markets on Tuesday, profit-taking is expected. The markets had a spurt in the final 30 minutes of Tuesday's trading. Today's early weakness may just be taking that last-minute spurt back. The 34 day moving average is currently acting as a resistance level in the Dow. The NASDAQ is nearing the 50 day moving average. Unless there is something that creates severe selling in today's market, consider the uptrend as still being in progress. Obviously with both the Dow and the NASDAQ in the overbought condition, watching for a sell-off needs to be done with more diligence. Continue to stay long, but be nimble.

3/17 - Stock Market Comments

The Dow formed a Shooting Star/Doji, the NASDAQ formed a Bearish Engulfing signal after a small Hanging Man signal. Both indexes are showing evidence of resisting at the 34 day moving average. Expect some profit-taking today, bringing both the Dow and the NASDAQ back down to test the T-line. Aggressive traders may want to go after the FAZ. If you are taking profits in positions, don't be afraid to reestablish those positions quickly if the buying starts back up at the T-line.

3/16 - Stock Market Comments

After a very strong week in the market, Friday would have been a good opportunity to take some profits. However, after some good consolidation, the buying was still present at the end of Friday. This leads to the prospect of continued upside movement. There has not been a candlestick sell signal yet in this rally. Stay long but expect some profit-taking along the way.

3/13 - Stock Market Comments

The strong move in the markets on Thursday were exactly as expected. The pattern is repeatable, with a strong candlestick bullish signal, a Doji day, and another strong candlestick day. Anticipate profit-taking today. But profit-taking should be illustrated with the markets closing near the high end of their trading ranges, even if that is still slightly negative. Whether this new rally is a bounce or a true reversal does not matter in the short-term. Continue to remain long as long as the markets close above the T-line. Watch the insurance companies, banks ,and heavy construction companies.

3/12 - Stock Market Comments

Wednesday's  Doji was not unexpected. It is typical for the market to have an indecisive trading day after a big day. Premarket futures show a relatively flat opening today. Continue to use the T-line as your point of reference. As long as the markets close above the T-line, the uptrend can remain in progress. The short funds produced profits as the market continued its downtrend. Use the leveraged long funds to take advantage of a bullish rally from here.

3/11 - Stock Market Comments

Tuesday was the first day the markets closed at the top end of their trading ranges in over a month. The strength of the market, which also confirmed signals, closed above the T-line in both the Dow and the NASDAQ. Witnessing profit-taking this morning would not be unexpected but the premarket futures indicate the Bulls are still participating. The European markets showed strength today. Add to the long positions but remain nimble. After an extensive downtrend, the prospect of a double bottom formation is not out of the picture. Expect at least a day or two of bullish trading.

3/10 - Stock Market Comments

Today's premarket futures indicate bullish strength that completely offsets Monday's selling. This does not indicate a change in market trend but it does show a continuation of indecisive trading in the oversold conditions. Until this market shows a definite reversal signal and confirmation, the downtrend is still the predominant trend indicator. However, if the market shows more indecisive trading, creating a relatively flat trading area, that may be the period of indecisiveness prior to a change of direction. If indecisive trading remains evident, some lightening up of the short funds would be prudent.

3/9 - Stock Market Comments

The late buying of Friday formed a Doji in the Dow but did not form any significant signal in the NASDAQ. The prognosis remains the same, the markets are in a downtrend until a candlestick reversal signal is followed by a close above the T-line. Continue to use the short funds as your portfolio anchors. Any long positions should be established with a very short time horizon.

3/6 - Stock Market Comments

The selling of Thursday continues to reveal the downtrend is in progress. It will remain so until a candlestick buy signal is followed by a close above the T-line. Reestablishing short fund positions on Thursday was logical when the markets came back down through the previous day's lows. Long positions can be placed in the mining stocks. Any long positions placed in these market conditions needs to be done while keeping your fingers on the triggers. Remain nimble, the bias is still to the downside.

3/5 - Stock Market Coments

As mentioned in last night's comments, the indexes closing away from their highs yesterday caused a little bit of concern. The Dow had the opportunity to close more than halfway up the previous dark candle, forming a Morning Star signal.  Todays premarket futures demonstrate more weakness.  Nothing yet has confirmed a change of investor sentiment.  Any short positions or short funds that were covered yesterday should be reestablished if today's trading closes the markets near the lower end of their trading range. Bottoming action in this area requires a close near the higher end of the trading range, forming a hammer type signal today.

3/4 - Stock Market Comments

With the markets in a very oversold condition, any good news will spur a bounce. China's economic news was better than expected. The Asian markets were up strong. Premarket futures are up strong after yesterday's Doji in the Dow. As long positions and cover the short funds. However, a market reversal does not occur in one day. Continue to watch the T. line. That will be the final indicator that a true reversal has occurred.

3/3 - Stock Market Comments

The hard selling yesterday was relatively controlled, not the panic selling yet expected on a capitulation day. Obviously the downtrend is still in progress. This morning  might show  a balance but until a strong bullish candlestick signal appears, followed by a close above the T. line, the downtrend has to be considered still in progress. Be prepared for a capitulation day. That is where huge profits to be made.

3/2 - Stock Market Comments

The weakness on Friday sent both the NASDAQ and the Dow below support levels. The markets are in oversold conditions but there has not been any indication yet out any change of investor sentiment. Continue to use the short funds as the basis of your portfolio. Any long positions should only be held based upon maintaining strength. However, the bigger profits are going to be made on the short side until a definite reversal signal appears in this market.


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