Daily Market Comments - January 2006
1/31 -- Stock Market Comments
The market will probably continue to trade relatively flat until the Feds come out with the predicted ¼-point interest rate hike. Nothing has changed the uptrend, stochastics are still in an upward direction. Continue to hold the long positions.
1/30 -- Stock Market Comments
We had a nice surprise on Friday with another strong day in the market that completely took back the loss of last Friday. The market should be in a relative uptrend. We expect to see a couple of calm days until the Feds announce their interest rate hike. Continue to hold your long positions.
1/27 -- Stock Market Comments
The bullish day on Thursday should result in a little bit of consolidation today, especially with the economic numbers being much weaker than expected. The fact that the Dow closed more than halfway up the large dark candle of last Friday indicates that a downtrend in the markets is not a high probability. The uptrend may not continue with any great force, which will be fine for the leading strong sectors to perform. Continue to hold the long positions in the strong sectors.
1/26 -- Stock Market Comments
The weakness in the markets late in the day has been concerning. For the past three days, the buying appears to fizzle out in the afternoon. Although the market has moved in a positive direction, it has not come back up through the mid-range of the large bearish candle formed last Friday. Indecisive flat trading after a big downdraft in the markets usually precludes another big downdraft. This would mean that the Dow could target the 200 day moving average if we do not see some strong buying going into the close of today. Currently, the morning futures are showing strength. That strength needs to be continued into the close. A close above the midpoint of the last large dark candle would indicate that the Bulls have finally come back into the market. Continue to hold your long positions but be nimble on a weak close today.
1/25 -- Stock Market Comments
The Bullish Haramis are still in effect. The selling had stopped on Monday and was confirmed on Tuesday with bullish candles. The NASDAQ and the S&P 500 formed strong signals right on the 50 day moving average. This morning's futures indicate more buying. Continue to hold the long positions, especially in the sectors that are acting strong from the beginning of the year.
1/24 -- Stock Market Comments
Company earnings appear to be coming in fairly strong this morning. On Monday, Bullish Haramis formed in all of the indexes. This is an indication that the selling had stopped. A positive open today would indicate that the uptrend is still in progress.
1/23 -- Stock Market Comments
Stock investing advice seems to disappear after days such as Friday. Most investment programs do not have a trading plan after a severe down-move. Candlestick signals eliminate the need for stock investing advice. Candlestick analysis incorporates what investor sentiment did and prepares the investor for the next strategy. What stocks/sectors have bottomed out? That is what the candlestick signals will reveal. What stocks/sectors have now started to turn down? That is what the candlestick signals will reveal. What may have been viable stock investing advice three weeks ago may not have any relevance in today's market trading. Analyzing the candlestick signals allows the investor to evaluate what should be done from this point. This morning's futures indicate buying coming back into the market. A Bullish Harami forming today in the Dow and the the NASDAQ will have different implications than if we see more selling going into the close today. Start watching for candlestick buy signals.
1/20 -- Stock Market Comments
The Dow formed a Bullish Harami after the previous day's Hammer signal that just touched the 50 day moving average. The NASDAQ stayed strong all day long, creating an Island Reversal. Although the uptrend may not be ready to start immediately, the signals indicate that the pullback should be over. It would not be unusual to see a few days of consolidation while the moving averages come up to meet the trading area. Specific sectors, such as the biotechs, and some of the oil stocks are still acting very strong.
1/19 -- Stock Market Comments
Although the market sold off on Wednesday, they did not have an aggressive selling nature. The Dow formed a Spinning Top that just touched the 50 day moving average. The NASDAQ opened at its lowest point and traded positive after that. What could have been big selling days due to the Japanese market selling off and the potential of Crude Oil prices going much higher, ended up being what appeared to be a normal profit-taking pullback that has been anticipated from the signals. Look for some strength in the markets today. Crude Oil prices and Natural Gas prices remained weak Wednesday.
1/17 -- Stock Market Comments
The lower futures this morning demonstrate the further profit-taking after the strong two week rally. Some lower earnings reports and the concern for oil prices can be the reason today. Take profits in companies that have charts turning over. However, a number of sectors, especially the biotechs, are still holding well.
1/13 -- Stock Market Comments
The profit-taking started moving in on Thursday. Expect another day or two of profit-taking before the uptrend can resume. After Thursday's big selling, a Doji-type day should be anticipated today.
1/12 -- Stock Market Comments
The uptrend is still intact. Continue to hold the long positions but be prepared for a profit-taking session very soon.
1/11 -- Stock Market Comments
The Dow formed a Dragonfly Doji on Tuesday, showing indications that some profit-taking is starting to occur. The NASDAQ formed a bullish candle after opening lower. Stochastics are now in the overbought conditions for all of the indexes. Start taking some profits. Big game positions might be reduced to half positions, moving the closed position funds to lower risk ones.
1/10 -- Stock Market Comments
This morning's futures are showing selling a indication. After five strong days to the upside, the markets may take a breather for a day or two. However, the magnitude of the selling in the morning futures do not indicate a reversal of this uptrend, but more of a profit-taking environment. Continue to hold long positions that do not show signs of sell signals. The strength of this market over the past week could start the formation of J Hook pattern over the next few days.
1/9 -- Stock Market Comments
The strength of the market in the first week of trading in a new year is usually a sign of good strength for the next few weeks. The NASDAQ, Russell 2000, and S&P 500 all closed at significant levels above the recent high resistance levels. The Dow closed just slightly above the highs. Expect the uptrend to continue. Any pullbacks should come back to the resistant levels to test for support. As of now, there have not been any indications of selling. However, seeing a day or two of consolidation should be expected.
1/6 -- Stock Market Comments
As discussed in last night's chat session, the markets are all testing recent highs. The Doji in the Dow needs to see strength and break out to the upside which appears to be occurring in the futures this morning. A strong day today will confirm that wave three of a three wave pattern is in progress. Continue to hold the long positions. The markets are obviously telling us what investor sentiment is looking for in 2006.
1/5 -- Stock Market Comments
The strength from the Bullish Engulfing signal was followed through on Wednesday in the Dow. The NASDAQ also continued the bullish move following a strong signal bouncing off of the 50 day moving average. The strength should continue for the next few days. If prices break through recent highs, of which they are getting very close to, watch for a strong rally with the same magnitude as we saw from mid-October too late November. Continue to hold the long positions.
1/4 -- Stock Market Comments
The strong Bullish Engulfing signal coming off of the 50 day moving average in the Dow clearly illustrated the buyers coming back into the market. With the strength of the markets on Tuesday, expect some sort of consolidation for most of the day today. Continue to hold the long positions.
1/3 -- Stock Market Comments
The market trends, prior to the end of the year, will have very little to do with the trend starting at the first of the new year. Have the fundamentals changed? Definitely not, but investor psychology is what will move the markets in the first weeks of January. Use the candlesticks to evaluate what investor sentiment is indicating.
As usual, the market trends can be easily analyzed with candlestick signals. The trends will still incorporate the usual results of positive and negative investor sentiment. However, new dynamics for investing need to be monitored in the coming year. These dynamics include technology breakthroughs that cannot even be projected. The visual results of candlestick signals will be able to identify where and when technological breakthroughs are occurring. Breakout signals should indicate which companies will be providing new products or services that can greatly influence industries. Candlestick Forum members, during 2006, will benefit from a more in-depth research program stimulated by candlestick signals being applied to hedge fund positions.
The futures are showing a strong open for this morning. The Friday's selling brought the Dow back down near the 50 day moving average. Stochastics are starting to move toward the oversold area. Continue to hold the long positions with the expectation that strong buying might occur, bouncing off of the 50 day moving average area.