Daily Market Comments - January 2016
01/29 - Stock Market Comments
The strength in the Dow and the S&P 500, if maintained today, what illustrate the top of the trading range of the past few days has now been breached. The NASDAQ is also attempting to trade back up above the T-line. The market conditions at this point lean toward higher probabilities of an uptrend starting based upon the past seven days of trading now looking as a support level. Having both long and short positions in the portfolio is still prudent but obviously if the bullish strength continues into the close, any short positions that are showing reversals should be lightened up and/or closed.
01/28 - Stock Market Comments
The markets continue to trade in an indecisive manner. Although the NASDAQ is trading higher, it is trading below where it opened. Crude oil is trading up $1.50 today adding strength of the oil sector stocks. With the market still in a very indecisive state, use each individual stock chart as the primary analysis.
01/26 - Stock Market Comments
Both the Dow and S&P 500 are currently forming a bullish stick sandwich signal. This continues to make the T-line an important analytical factor. Crude oil is also forming a potential stick sandwich provided it closes near the top end of its trading range today. The more prices can continue to close above the T-line, the more indication bullish sentiment is coming back into the markets.
01/25 - Stock Market Comments
The T-line continues to be an influence on the market trend. The Dow, after closing just below the T-line on Friday, is continuing to have problems getting up through the T line. The NASDAQ, the strongest of the indices on Friday, is currently trading back down to the T-line. The S&P 500 and the transportation index also are hovering just below the T-line. Crude oil is doing the same. Until there is a confirmed evidence that the T-line is not going to be acting as resistance, the downtrend has to be considered still in progress. However, it remains important to see how these market indexes closed at the end of the day. There have been candlestick reversal signals but the T-line still needs to be the final confirmation.
01/22 - Stock Market Comments
The T-line is coming back into play.The NASDAQ gapped up at the T-line and is now trading slightly positive from there making for a potential Dodie sandwich. The Dow and the S&P 500 are trading right at the T-line but the transportation index, after a MorningStar signal yesterday is now trading well above the T-line. If today's strength maintains, the downtrend should now be converting to an uptrend.
01/21 - Stock Market Comments
The hammer signal in the Dow and the S&P 500 yesterday is being confirmed with today's positive trading. The NASDAQ is also indicating bottom support. It will be important for the buying to continue into the close today. The next viable target will be the T-line. Although bottoming signals are appearing, and the candlestick charts indicate the probabilities indicate at least a bounce back up to the T-line area, the overall market trend still remains tentative until there is a close above the T-line. Numerous short positions have now been closed and any long positions added in this area should not show any negation of buy signals.
01/20 - Stock Market Comments
Where do most people sell? They panic sell at the bottom. How is that panic selling graphically depicted? When prices move excessively away from the T-line. This is what is occurring in the market indexes. This is what is occurring in crude oil prices. Does this mean a reversal is about to occur? It indicates that these are the conditions where a reversal is likely to occur. Watch your short term intraday charts, the 10 min. chart, to see if there becomes signs of a reversal. Until that time, continue to stay short.
01/19 - Stock Market Comments
A trend/price moves in a direction based upon investor sentiment. In a case of the indexes, the downtrend can still be easily identified due to the lack of a candlestick buy signal and a close above the T-line. A change in the indexes require a significant candlestick reversal signal. This usually occurs when some world event creates a different outlook from investors. Currently the major influence on the world markets, crude oil, has not had a change of downward direction. Although today's trading is positive, it has not yet created any signal that would show a change of investor sentiment.
01/14 - Stock Market CommentsThe September low for the Dow was 15,942. Currently there has been nothing to indicate a change of investor sentiment, the downtrend remains in progress. Continue to stay predominately short. Obviously there are very few long positions that have been staying above the T-line.
01/13 - Stock Market CommentsAlthough the market indexes started trading positive today after yesterday's Morning Star signal, the strength of the bullish trading is very tentative. This would imply at best a bounce back up to the T-line. The more indecisive the bullish trading, the higher the prospects the market is merely bouncing, be prepared for more downside. A true reversal requires good bullish strength.
01/12 - Stock Market Comments
A Doji in the oversold condition, a good distance away from the T-line, is a high probability reversal signal on positive trading the next day. That is currently what is occurring. However, bullish confirmation still requires a strong candlestick formation today, a close near the top end of the trading range. Week signals, closing at the lower end of the trading range, produces the potential of a sideways consolidation for the next few days, waiting for the T line to come down closer to the trading range. Downtrend in stocks, especially the biotech's, require confirmed reversal signals before covering short positions.
01/11 - Stock Market Comments
The trend is your friend. Although this may sound simplistic, it can be much better applied when watching the candlestick charts. Simply stated, the downtrend remains in progress until you see a candlestick reversal signal and a close above the T-line. The early positive trading is not unusual in a downtrend, just as early selling in the day usually occurs an uptrend, followed by buying in the afternoon. Stay short with any long positions continuing to show very compelling reasons to stay long.
01/08 - Stock Market CommentsThere were no pics today for a very simple reason. If you do not know what is happening in the market, you're much less likely to know what is going to happen in individual stock prices. There are times when you just have to sit and watch.
01/05 - Stock Market CommentsThe markets are now selling off after their initial bullish bounce this morning. The current downtrend will remain in progress until there is a definite reversal signal confirmed, continuing to make the bottom of the trend channel the hovering area. These market conditions are not any different than what has been experienced over the past three months. The portfolio strategy remains the same, have both long and short positions in the portfolio.
01/04 - Stock Market CommentsThe rule of thumb is that the markets will usually give you an indication of what investor sentiment will be for the year, at least for the first quarter, based upon the market action of the first few days. We may be seeing an anomaly today because of the knee-jerk reaction to what is occurring in the Chinese markets.