Daily Market Comments - February 2010
2/26 -Stock Market Comments
The strong reversal day on Thursday continues to illustrate the whipsaw action of this market. Both the Dow and NASDAQ are set up for a good J-Hook pattern if the market shows strength today. However, the direction of the market is still in question based upon its action over the past three days. The markets are at a pivotal point. Selling today would give more credibility to the 50 day moving average acting as resistance. Keep your powder dry until it can be identified which way the market is going to move.
2/24 - Stock Market Comments
The strength in today's trading indicates that the T-line may be acting as a pullback support level. The NASDAQ is currently creating a Bullish Harami after it closed near the T-line on Tuesday.
Don't let the initial bounce influence your portfolio positioning until there is evidence this buying will remain. Obviously, the markets need to stay bullish going into the close. This could be setting up for a J-Hook pattern, using the T-line as support, or this initial buying is a common reaction, buying the morning followed by selling in the afternoon.
If the markets climb up above Tuesday's open, that will be evidence that Tuesday was merely a profit-taking day.
2/23 - Stock Market Comments
The Dow had two indecisive trading days right on the 50 day moving average. Both the Dow and the NASDAQ are in the overbought condition. Today's premarket futures, although just slightly weaker, will be bringing the trading back down below the T-line. Any further weakness today should instigate closing long positions and adding some short positions.
2/22 - Stock Market Comments
The Dow formed a Doji just above the 50 day moving average. The NASDAQ provided a stronger bullish candle on Friday, also above the 50 day moving average. It will be important for today's trading to stay above that level. The pullback below the 50 day moving average could indicate a few days of consolidation. Continue to hold the long positions that provide strong chart patterns.
2/19 - Stock Market Comments
With the Feds raising the discount rate last night, there was concern that the market would have a big reversal. However, it turns out the rate was somewhat expected for the last few weeks. Obviously, it was already built into the market trend. Continue to hold long positions but keep in mind the markets are now in the overbought condition as they are bobbing near the 50 day moving average. Be diligent.
2/18 - Stock Market Comments
The markets traded relatively strong on Wednesday after the previous strong move the day before. It appears as though today's economic news will provide an opportunity for the markets to take some profits. Be prepared for the market action after the initial opening. Although the market will pull back, anticipate a number of stocks to further their advance. Consider the uptrend still in progress until a confirmed sell signal appears.
2/17 - Stock Market Comments
The bullish trading of Tuesday confirmed the recovery signals of Friday. Both indexes are now trading well above the T-line. With the stochastics not yet to the overbought area, this makes the 50 day moving average the next likely target. Anticipate a few days more of positive trading. That does not precluding some profit-taking occurring before the indexes get to the 50 day moving average. Stay long and be nimble.
2/16 - Stock Market Comments
The Dow spent the day consolidating on Friday but came back up toward the top end of the trading range at the end of the day. The NASDAQ opened lower and proceeded to trade above the open for the rest of the day, closing in positive territory above the T. line. Today's positive open in the premarket futures warrants buying immediately.
2/12 -Stock Market Comments
The premarket futures indicate the indexes will be trading back below the T-line again. This continues to put the market direction in question. Obviously, no new buying should occur until it becomes apparent the markets will be selling off in the morning but coming back up in the afternoon. Otherwise, the sideways motion of this market may become the predominant direction.
2/11 - Stock Market Comments
Today's weakness on the open is providing more evidence that the T-line continues to act as resistance. After Wednesday's Doji signals in both the Dow and the NASDAQ, bullish confirmation was needed on today's open. Be prepared to add back to the short positions if there is not a strong bullish reversal within the first 45 minutes of trading.
2/10 - Stock Market Comments
The strength of Wednesday's trading, in the same price levels as the Dow, demonstrated a Long-legged Doji and is now reinforcing the bottoming analysis. Both the Dow and the NASDAQ closed just slightly below the T-lines on Wednesday. Today's trading requires strength, enough to get both indexes to close above the T-lines . Any buying will still require investors to be quick on the trigger. Strength needs to be seen going into the close today to confirm that the Bulls are now having the major influence on the market trend. Weakness today would make a sideways scenario more prominent.
2/9 - Stock Market Comments
The premarket futures indicate a positive open. After Monday's sell-off going into the close, following Friday's buying going into the close, the markets are now showing indecisive action. Short positions need to be analyzed carefully after the market shows a direction after the inital buying today. A positve trading day will reinforce the big Hammer signal of Friday.
2/8 - Stock Market Comments
The buying surge of late Friday afternoon formed Hammer/Harami signals with market conditions in the oversold area. Today's trading required bullish confirmation, which did not occur on the open. Consider the market still being in a downtrend but with the possibility of bottoming actions starting to occur. Continue to hold short funds, any bullish trading requires confirmation.
2/5 - Stock Market Comments
Thursday's hard sell-off was in anticipation of the jobs reports being relatively negative when released this morning. However, the jobs report did not appear to have as bad news as everybody was expecting. The downtrend should still be in progress but today's trading will probably try to compensate for Thursday's end of day selling. Any purchases in this area should be followed very closely.