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21. August 2008 by admin.
Thursday,
The markets further solidified a bottom today from which they can bounce from… This means those looking to trade tomorrow should do so in favor of the longs rather than shorts, but there is the potential that the market could break down and continue in the direction of short plays, so have that stop and exit strategy in place before you enter the trade.
The DJIA 12 points today adding to yesterdays’ gains but the real story is in that hammer candlestick formation confirming my bounce theory. You can make assumptions all day long about how high the bounce can go, but the main point is to be trading in tandem with the overall market – don’t be short when your market is bouncing higher.
The NASDAQ lost 8 points today, but this just means it is more due a bounce than it was yesterday, and I would look for this next week. Yes the rally could start Friday, but I am not so certain there is enough confidence in the market to have investors holding over the weekend… I would not do it; not on the long side anyway. The NASDAQ is finding support on the middle BB line and that means this bounce is highly likely to be the last one before our next peak takes us to the lower BB line. In other words, don’t get to attached to the long trades, they are not likely to last, and if the NASDAQ fails to break into new highs we will have a double top signal that could put bears in complete control of this market for some time to come.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (03); this tells us today’s buying was not that of smart money and this confirms the lasting power of this bounce is nothing to get excited about. I would look for the market to repeat more of today’s action tomorrow, as lows are tested and new highs are made where short-term potential is relevant to those trading smart.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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20. August 2008 by admin.
Wednesday,
The markets bounced as projected yesterday, and will likely try to add to it tomorrow though testing of lows will be important…
The DJIA gained 68 points today after shedding more than 300 points in two days earlier this week. As I have said in the past this is just a bounce in my opinion, but one we, as short-term traders can, have, and will continue to use in our favor. The market is slowly but surely breaking down here but it will take time for the majority of traders and investors to realize this so we will have very choppy waters as bulls continue to try and use short-term overselling as a buy opportunity. In short this is a great trader’s market.
The NASDAQ gained 4 points for the day finding support at the middle BB line as seen on the 6 month daily chart of the average. Today’s activity was on increased buy volume and does suggest further upside attempts will be likely tomorrow, but the MACD is still approaching a bearish crossover, so I continue to view this market as overall bearish, but that does not mean we can not take long trades while the opportunities are available, and both of those we used today were very profitable. The moral of the story is to trade with the current market, not against it.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (02); this tells us today’s buying was not that of smart money and this confirms the lasting power of this bounce is nothing to get excited about. I would look for the market to repeat more of today’s action tomorrow, as lows are tested and new highs are made where short-term potential is relevant to those trading smart.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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19. August 2008 by admin.
Tuesday,
The markets sold off further today catching up to reality as news pours in showing the economy is not going to provide reason to grow stocks from here… Not yet at least.
The DJIA lost another 130 points today and the MACD Indicator formed the bearish crossover. Today’s candlestick activity calls for more selling, but with the market already down -300 points in two days, I would look for a bounce sometime tomorrow. It is important to note that a bounce is not to be mistaken for a rally; you buy a rally, but short a bounce and that is what we will be doing until this market really bottoms.
The NASDAQ lost 32 points for the day and still has much lower to go, but it too (like any sell off in the market) is not likely to fall straight down. I do look for a bounce tomorrow, and if one is not forth coming tomorrow it only becomes that much more due. I would not be a buyer of any stock here for the long side, but would be shorting any bounce with quality short sell signals.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (00); this tells us we have already fallen to one support level and this further confirms the anticipation of a bounce, though we believe it will be a “dead cat” bounce.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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18. August 2008 by admin.
Monday,
The markets finally broke down in my opinion… can they bounce tomorrow? Possible, but the upside would still be limited and today’s activity shows there is no buying interest in the market sell off at this point, so I would continue to look for more selling to be the order of the week.
The DJIA lost more than 200 points today, but closed down only 180 points for the day… after a major sell off and on such low volume it is not unheard of to see a bounce attempt the following day, but the chart shows we have now closed below the uptrend line, which had already been pierced three separate times before today, and with the overall up trend activity since July the 15th looking like a bear flag or a bull trap, I would not look for the market to do anything but sell off here and I definitely would not recommend buying this little pullback today… In fact I would look for the blood bath to get worse before it gets better.
The NASDAQ lost 35 points today, but being top heavy and forming a clear continuation signal on the chart today, I would look for the selling to increase this week. The slow stochastic indicator is clearly overbought at 85 and the MACD lines are quickly converging in what will be a bearish crossover in the near future. In short, if you are long, you had better be taking those profits off the table, as we said last week, and if you really want to make money in this market you need to be short.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (03); this tells past supports signaled last week have broken down, and “Smart Money” is not buying this pullback here. The smart trade is to be short.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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15. August 2008 by admin.
Friday,
As we have said before, Friday market activity is a good market sentiment reading as it shows how confident investors or traders are heading into the weekend… last Friday we had a +300 point rally in the DJIA and this Friday we close only up only 43 points with the NASDAQ closing down 1 point.
Is investor confidence deteriorating? I’m not even sure if there is any investor confidence left in this market, but I would say the rally in the NASDAQ is coming to a close and that is beginning to be reflected.
The DJIA advanced today but on very weak volume and with the candlestick formation still below yesterday’s high with some selling from the high this morning we have a weak continuation signal, very close to an inverted hammer. The MACD averages are still constricting and will in the future turn into the dreaded bearish crossover, and with the DJIA chart already breaking through the lower support back in June, we are looking for a continuation lower here, and analysis of the chart shows the past bounce from the July low to be finding resistance at the old support line broken in June… In short we have not yet bottomed.
The NASDAQ (my arch nemesis at the moment) lost 1 point today with a heavily overbought slow stochastic of 89.80 and an RSI reading now at 63.53; if the reading at 50 is fair valued and below 30 is oversold, the RSI at 63.53 is overbought, and as mentioned yesterday if it hits +70 I would sell the NASDAQ and not look back for some time to come. Technical resistance based on what the chart suggests the high could be based on the advance structure is 2,475.00 and today’s high and sell off point was 2,473.22 – either way you slice it, it’s time to take some profits off the table in anticipation of the pullback, or better yet turn those profits into short buying power and play the ride down.
Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (01); this tells us yesterday’s base/support signal is weakening rather than being used as a buying opportunity – no big surprise there as “Smart Money” has been steadily selling the rally for some time now.
As Always; Be Smart, Be Patient, & You Will Be Successful.
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