Daily Market Comments - May 2009
5/29 - Stock Market Comments
A strong day up, a strong day down, a strong day up, what is the market telling you? Although indecisive, there hasn't been any evidence of the sellers taking control. The sideways movement of the Dow and the NASDAQ are showing signs of a slow J-Hook pattern set-up. Remain relatively long. Use the short funds to hedge when signs of weakness show up in the market. If this is the beginning of lethargic summer trading, concentrate on the strong sectors. They are strong for a reason. Use your candlestick scans to confirm the strong stocks in those sectors. That will make for a profitable summer.
5/28 - Stock Market Comments
What is the market telling us? Every time the market moves up, the Bears knock it back down. Every time the Bears knock it down, the Bulls move it back up. The result is an absolutely sideways market. This makes it very difficult to make big profits. Fortunately, candlestick signals and patterns reveal which sectors are gaining strength or losing strength. The solar stocks are obviously getting stronger. While everybody else may be selling in May and going away, there will be some very profitable moves over the next few weeks/months. Concentrate on finding the strong buy signals or sell signals.
5/27 - Stock Market Comments
The strong day on Tuesday confirmed the sideways channel bouncing off the channel bottom. Investor sentiment has not changed. The slow uptrend is still in progress. There are massive amounts of money waiting on the sidelines anticipating a pullback. The further this market continues its uptrend, the higher the probability the sideline money will start panicking that they are missing an uptrend. Continue to hold long positions. Tuesday's action should have stopped out most of the short positions early. This market should maintain the slow uptrend provided we do not witness a severe sell day.
5/26 - Stock Market Comments
The Memorial Day weekend was warm and relatively sunny in most areas of the United States. This past weekend usually signifies that summer has started. The trend of the markets may become more lethargic. Today's market weakness on the open should be viewed as an attempt to test the 34 EMA. Long positions should be held based upon specific chart patterns. Short positions should be held on the same basis. As the markets demonstrate a lack of decisive movement, analyzing individual stock charts will become more important. Keep the portfolio balanced.
5/22 - Stock Market Comments
Thursday's selling was relatively convincing after the Shooting Star of Wednesday. Although the Dow and the NASDAQ were off significantly, there are still many stocks/sectors showing strength. Thursday's selling did not indicate a strong change in investor sentiment but it did show the markets have gotten into a resting stage. Today's futures indicate a slightly positive open. The markets would have to close positive today to keep the trading range intact. Strong selling today would take the markets down into a lower range, which would warrant closing out more long positions and adding short funds to the portfolio.
5/21 - Stock Market Comments
Wednesday's weakness going into the close created a Shooting Star signal in the Dow. The high of Wednesday was at the same level where the Dow peaked out last week. Today's weakness on the open has brought the Dow back down to the 20 day moving average. It needs to show support here today, otherwise the 50 day moving average becomes the next target. Be prepared to take some profits today.
5/20 - Stock Market Comments
Unless there is a severe sell signal in the markets, the investor sentiment remains mildly bullish, keeping the indexes above the T-line. Continue to hold long positions and expect continued backing and filling as the Dow moves toward the 200 day moving average. As long as the trend in the markets doesn't show a severe breakdown, the candlestick charts will demonstrate when it's time to take profits in individual stock charts.
5/19 - Stock Market Comments
After a couple of days of indecisive trading just below the T-line, the strength in Monday's trading, coming back up through the T-line, demonstrates a lack of selling pressure in this market. The uptrend is back in progress. Short positions were stopped out on Monday. Move back to long positions as long as the markets close above the T-line.
5/18 - Stock Market Comments
Both the Dow and the NASDAQ came up and tested the T-line area on Friday but failed to close above it. The downtrend remains in progress. Today's premarket futures show a strong open. Any buying done today requires the same diligence as Friday, be ready to close out the positions if the market shows weakness going into the close.
5/15 - Stock Market Comments
Thursday's positive trading still had the Dow and the NASDAQ trading below the T-line. Today's trading may not show too much enthusiasm in one direction or the other due to options expiration. Overall, as long as the indexes do not close above the T-line, consider these markets as being in a downtrend. Whether this is for two days or two weeks, we will have to let the market show us that.
5/14 - Stock Market Comments
After the hard selling of Wednesday, expect a little bit of a bounce today. However, with both indexes now below the T-line, investor sentiment should remain bearish for at least the next few days. The 50 day moving average should be the likely target after the failure at the 200 day moving average.
5/13 - Stock Market Comments
The Dow continued to close above the T-line. However the NASDAQ closed below the T-line. Today's weakness in the premarket futures provides the evidence that he Bears are starting to take control. Take profits and look for short positions.
5/12 - Stock Market Comments
Monday's selling in the Dow was not confirmed in the NASDAQ. Although the market appears to be moving sideways, it has not yet closed below the T-line. Consider the uptrend as being in progress until that time. Continue to hold long positions but remain nimble upon seeing any hard selling in the markets. The solar sector appears to be picking up strength.
5/11 - Stock Market Comments
The strength seen on Friday negated the weakness seen on Thursday. This morning's futures show the market giving back most of what it gained on Friday. This indecisive action in the markets reveals a possible change of investor sentiment. However, the trend rules still remain in existence, the uptrend will continue until we see a candlestick sell signal and a close below the T-line. Remain nimble but continue to hold good long positions.
5/8 - Stock Market Comments
Thursday's sell signals in the NASDAQ and the Dow dropped both indexes to where they would need confirmed sell signals to show a reversal. However, today's positive open negates the selling pressure. Although there is potential for profit-taking up in this area, it's nothing yet to show a confirmed change of investor sentiment. Remain long but being nimble.
5/7 - Stock Market Comments
The market held up well on Wednesday, not moving too much in one direction or the other. The trading strategy becomes very simple, continue to hold long positions until a candlestick sell signal appears. It wouldn't be a surprise to see some huge updates in the near future, where everyone who's been telling us this is just a bounce in a downtrend starts finally putting money into the markets.
5/6 - Stock Market Comments
Tuesday's indecisive trading was expected after the strong day on Monday. The longer this market continues its uptrend, the bigger the prospects that exuberant buying will start coming back into the markets. Continue to hold long positions. The banking stocks should be performing very well today.
5/5 - Stock Market Comments
The Bulls clearly indicated the direction of the market on Monday. The Dumpling Top formation in the Dow has been completely nullified. The NASDAQ has had a steady uptrend that closed above the 200 day moving average on Monday. Expect some profit-taking in this area. However, there will be sectors that continue strong even during temporary pullbacks in the market indexes. The banking sector and the solar energy stocks will continue to show strength based upon the current patterns.
5/1 - Stock Market Comments
Thursday's late afternoon selling created a Shooting Star in the Dow and a Spinning Top in the NASDAQ. The NASDAQ just nudged the 200 day moving average on Thursday. Both indexes are currently trading at the top end of their trading channels. This is an area of possible profit-taking for the next few days. Unfortunately any weakness in the Dow reconstitutes the possibility of a Dumpling Top continuing its formation. Remain long but be prepared to take profits over the next couple of days of trading.