Wednesday, April 30, 2008

April Starts With a Bang, Ends With a Whimper

DJIA - 11.81, -0.09% SP500 - 5.35, -0.38% NASDAQ Comp. - 13.30, -0.55% Russell 2000 - 2.75, -0.38% The long awaited rate cut appeared and as expected was a quarter-point drop in the fed funds rate to 2%. The Fed indicated it likely leave the rate steady for the foreseeable future. The result, more indecision. The DJIA which closed up 391 on April 1st closed down 11 points on this the last day of April. April was, however, the first positive month in 2008 for both the DJIA and the S&P. The DJIA which was up more than 100 points at mid-day closed down. The S&P dropped more than 18 points from its high. The failure of the indices to bounce from support (DJIA, Nasdaq) or break through resistance (S&P, RUT) should heighten focus on a potential for a break of support. We are maintaining a short-term neutral trend reading for today. We will be watching for a break below support on the DJIA of 12,738, the S&P 1,380, the Nasdaq 2,400 and the Russell 2000 712.50. Both the S&P and Russell already appear more bearish short-term than the DJIA and Nasdaq. You can see this if you look at the candles or price bars closely. Trade accordingly. While many stocks have released earnings, continue to be mindful of any upcoming earnings releases. POT and AGU are in bull flag patterns showing bullish haramis today. MOS also bull flag broke the high of the low day. MON which has broken below its 20, 30 and 50 DMA’s was also showing a bullish Harami. These stocks have high volatility so trade accordingly. OIH is also in a bull flag with a bullish Harami today. If your outlook is bearish check the following charts, each has a bearish engulfing or other bearish candle pattern: Earnings Date FWLT 5/7 KLAC done PETM 5/21 GRMN done SHLD 5/26 WYNN 5/1 AMC XMSR date not yet announced Today’s Action Moving Down BIDU, GRMN, SOHU, FWLT, LEH, DECK, IBM, AMZN, ESRX, NKE, GS, AAPL Moving Up FSLR, STRA, MTL, MOS, MA, PCLN, MON, X, V, CF, POT, IPI, CNX, SCHN, JASO Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Two Hours To Fed

Look for the FOMC aanouncement at 2:15 ET. The Dow is up over 100 points, the S&P over 6 points, the Nasdaq over 14 points and the Russell 2000 over 4 points at mid-day. Remember we are at a significant resistance pivot point in the intermediate term sideways trend since January. Watch for a break or bounce and trade accordingly. V, MC, X reported earnings Monday and Tuesday and are moving up this morning. Watch DIA, SPY, QQQQ and IWM for a breakout or bounce down from resistance after the fed announcement. Also moving FXI, AAPL, PCLN and ICE.

Tuesday, April 29, 2008

Fed Announcement on Wednesday

DJIA - 39.81, -0.31% SP500 - 5.43, -0.39% NASDAQ Comp. + 1.71, +0.07% Russell 2000 - 6.44, -0.89% This market is so dull that we could almost use yesterday’s post except that the S&P is just below resistance instead of at resistance. Traders are still waiting for the fed announcement on Wednesday. Remember it’s not really the news, but the markets’ reaction to the news that’s important. Announcement time is 2:15 ET. Look for a typical increase in volatility about 15 minutes before the announcement until about 15 minutes after. It is generally a wild ride for about 30 minutes. If you’ve got a half hour to kill its worth watching just for the unusual price swings that occur. Watch Wednesday’s price action to see if the indices bounce down from resistance into the trading range since January or if there is a resistance breakout and a new uptrend ensues. Trade accordingly.

Remember, the unemployment and non-farm payrolls reports on Friday morning.

POT, MOS, MON and AGU fell sharply for the second straight day. MON even fell below its 30 DMA. Today’s Action Moving Up BIDU, AAPL, GS, PCLN, SOHU, IBM Moving Down MTL, POT, MON, CF, CLF, MOS, AGU, SCHN, CNX, MEE, IPI, ESRX, NUE, FWLT, X, AMZN Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Monday, April 28, 2008

Market Neutral as Traders Wait for Fed

DJIA - 20.11, -0.16% SP500 - 1.47, -0.11% NASDAQ Comp. + 1.46, +0.06% Russell 2000 + 3.49, +0.48% Monday was another day of neutral action with the DJIA and Nasdaq sitting on support, the S&P at resistance and the Russell 2000 moving towards resistance. Traders seem to treading water until Wednesday’s fed announcement. Also keep in mind the non-farm payrolls and unemployment reports will be out Friday morning. The big action today was the pullback in POT, MOS, MON and AGU. The news is that Goldman Sachs removed POT form its “conviction buy list.” On Monday POT traded 16.1 million shares compared with average volume of 10.8 million shares. POT moved down $13.58 closing at 193.50. Monday’s low was above last Thursday’s pullback low of 187.74. SOHU moved up $8.97 or 14.51% on earnings release. HUM moved $1.50 on earnings report. V was down $4.63 in after-market trading after releasing earnings today. X releases earnings tomorrow and Earnings X - 4/29 AKAM - 4/30 GRMN - 4/30 LAMR - 5/7 CELG - 5/8 Today’s Action Moving Up CLF, AAPL, SCHN, GRMN, AMZN, CELG, LEH, GILD, ISRG, JOYG, PETM, RIMM, CNX, Moving Down POT, MOS, AGU, PCLN, CF, IPI, MON, BIDU, FSLR, DECK, GS, IBM, BRCM, FWLT Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Saturday, April 26, 2008

Strong Support Bounce in Leading Stocks Amidst Mixed Market

DJIA + 42.91, +0.33% SP500 + 9.02, +0.65% NASDAQ Comp. - 5.99, -0.25% Russell 2000 + 4.81, +0.67% The DJIA finishes Friday with its highest close since January 3, 2008 and continues to hold above support. The S&P and Nasdaq are holding right at resistance. The Russell 2000 sits several points below resistance. The markets are in a very narrow trading range over the past six trading days. The market seems to waiting for indications from the Fed’s FOMC meeting which takes place next week on Tuesday and Wednesday, April 29 and 30. Look for the policy statement on Wednesday and 2:15 ET. The narrow trading range did not keep several of our leader stocks from significant support bounces on Friday. The non-farm payrolls and unemployment reports will be out before the open on Friday. Estimates are for loss of 80,000 jobs and a 5.2% unemployment rate for the month of April. Friday’s Action BIDU +$21.69, DECK +$25.31 both on positive earnings announcements We alerted you to the support bounce Friday morning occurring in POT, MOS, MON and AGU. Each stock continued moving several dollars higher by Friday’s close. POT was +13.18, MOS +8.12, MON +6.56 and AGU +4.35 Support Bounce POT, MOS, MON, AGU, CF, CLF, MTL, FSLR, MEE, PCLN, AMZN, SCHN, FWLT Breakout MER Moving Higher GS, IPI, ESRX Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Friday, April 25, 2008

MSFT Leads Dow and Nasdaq Lower in Early Trading

After 90 minutes of trading the DJIA is down about 30 points, the S&P is up slightly and the Russell 2000 is down about 2 points. The big news this morning; after reporting earnings yesterday MSFT gapped lower and is down over 6%. Since MSFT is a component of both the DJIA and the Nasdaq 100 it is leading both indices lower. CTXS, FISV, RIMM, SNDK and UAUA are moving lower and adding selling pressure to the Nasdaq 100. AGU, MON, MOS and POT are rising after pulling back for two days and are forming potential bullish haramis and bull flags. Trade accordingly.

Markets Move Higher on Thursday

DJIA + 85.73, +0.67% SP500 + 8.89, +0.64% NASDAQ Comp. + 23.71, +0.99% Russell 2000 + 8.96, +1.27% Markets rallied for the second day in a row on Thursday. The DJIA is holding above support. The S&P and Nasdaq Composite both touched resistance today but failed to close above resistance. The Russell 2000 continues to hold a few points below resistance. The Nasdaq short-term market trend is up but the other indices are still neutral. Watch Friday’s action fro potential shift. Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral Due to workshop and travel schedule on Thursday watch for a more complete commentary on Friday and over the weekend.

Wednesday, April 23, 2008

Semiconductors Gain As BRCM Soars 16%, IPI Goes Public

DJIA + 42.99, +0.34% SP500 + 3.99, +0.29% NASDAQ Comp. + 28.27, +1.19% Russell 2000 + 4.40, +0.63% Oil $118.30 The Nasdaq Composite regained 28 of the 31 points it lost on Tuesday. The DJIA, S&P and Russell 2000 each regained less that half of Tuesday’s losses. The Nasdaq 100 is still above support on its recent breakout, the DJIA is at the resistance/support area and the S&P and Nasdaq Composite are holding just below resistance. The Russell 2000 is still below the resistance zone. The Nasdaq was supported by a 4.12% gain the Semiconductor Index ($SOX). BRCM rose $3.84 or 16.31% on a 200% plus increase in volume on a positive earnings report. Watch the semis as they are a major sector in the tech laden Nasdaq index. POT, MOS, MON and AGU all had significant pullbacks today. POT gained $2.20 in after-market trading. POT earnings are scheduled for tomorrow morning. Both AAPL and AMZN reported earnings after the close today. AMZN dropped $3.59 in after-market trading. AAPL traded lower but recovered down just 58 cents in after-market trading. The AAPL 165 straddle was $20.45 and the AMZN 80 straddle was $11.30 at today’s close.

Intrepid Potash (IPI), IPO priced at 32, closed at 49.01 on its first day of trading. IPI based in Denver is the largest producer of potash in the U.S. Another POT?


Today’s Action Moving Higher ESRX, CHRW, AMZN, GRMN, CELG, FWLT Moving Lower FSLR, POT, MOS, AGU, MTL, CF, MON, MER, JASO, DECK, MEE, CLF, LEH Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Tuesday, April 22, 2008

Oil Closes At All-Time High, Markets Pull Back

DJIA - 104.79, -0.82% SP500 - 12.23, -0.88% NASDAQ Comp. - 31.10, -1.29% Russell 2000 - 14.29, -1.99% Oil 118.07 new closing high The DJIA pulled back closing near the mid-section (S-1) of Friday’s large white candle. This is at the area of former resistance which theoretically should now be support. The Nasdaq 100 gapped up on Friday, so its chart does not show a large white candle, also pulled back today and is sitting on top of the gap and the former resistance area. The S&P closed deep into Friday’s large white candle and did not break the low of the high day. The Nasdaq Composite closed into its Friday gap and above the bottom of the gap. The Russell 2000 did close below the low of the high day which was Friday. The Russell continues to be relatively the weakest of these five indices. Oil hitting all-time highs is putting pressure on the market and may cause the market to move down further from resistance if it continues to rise. OIH was down 2.74, XLE up 4 cents, USO up 70 cents, XOM up 17 cents, COP up 55 cents, and APA up 45 cents. Oil ETFs and stocks appear to be experiencing short term profit taking as they mostly consolidate in areas of resistance. While it would be appropriate to state the Russell 2000 short-term market trend is down, the other indices are still inside of Friday’s price action so they are neutral. We will shift the short-term trend status if price moves below Friday’s price range. AAPL earnings will come after the close tomorrow (Wednesday) rolled over and closed down 7.96 breaking the low of the high day. It did rally up 1.76 in after-market trading. Trade accordingly. Continue to watch the earnings release dates on stocks you are trading and the dates of stocks we listed from Monday’s post and trade accordingly. Today’s Action Moving Up FSLR, POT, MTL, SCHN, FWLT, MOS, CLF, EBAY, JASO, MER Moving Down UAUA, BIDU, DECK, PCLN, STRA, CF, GRMN, MON, CELG, MEE, IBM GS, NKE, AMZN, LEH, EXPE, AGU Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Monday, April 21, 2008

DJIA - 24.34, -0.19% SP500 - 2.16, -0.16% NASDAQ Comp. + 5.07, +0.21% Russell 2000 - 3.07, -0.43% Oil 117.48 - record high close The DJIA and Nasdaq 100 ($NDX) both traded above their horizontal resistance area. The S&P, Nasdaq Composite and Russell 2000 each traded below resistance again today. Technically the indices appear to be getting stronger and we do not have an intermediate term uptrend until the indices break resistance and stay up resistance. Earnings: BTU – 4/22 AAPL - 4/23 AMZN – 4/23 POT - 4/23 BIDU – 4/24 DECK – 4/24 CF – 4/25 MEE – 4/25 AGU – 4/28 V – 4/28 FSLR – 4/29 MA – 4/29 GRMN – 4/29 CLF – Stock Split 2:1 on 5/16 Today’s Action Breakouts AAPL, FWLT, MON, RIMM Moving Higher AGU, BIDU, BTU, CF, FCX, FSLR, MA, MEE, MOS, MTL, POT, SLB, V Pullbacks CLF, DECK, Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

30 Minutes Before the Close

With about 30 minutes to go the Nasdaq Composite has turned positive. The DJIA, S&P and Russell 2000 are still down slightly for the day. Technically the Dow is still above its resistance breakout on Friday. The S&P and now Nasdaq Composite are sitting just below resistance. The Russell 2000 is still about 13 points below resistance. The markets are pausing and profit taking seems to be moderate on this first trading day after options expiration last Friday. Stocks moving higher today: AAPL, AGU, BIDU, BTU, CF, FSLR, FWLT, MA, MEE, MTL, MON, MOS, NKE, POT, SLB, SNDK, V and VRTX. Numerous earnings reports are also coming this week.

Sunday, April 20, 2008

Dow Closes Above Resistance

DJIA +288.87, +1.81% SP500 + 24.77, +1.81% NASDAQ Comp. + 61.14, +2.61% Russell 2000 + 13.07, +1.85% The DJIA broke through and closed above horizontal resistance on Friday while the S&P closed at resistance. The Nasdaq Composite and Russell 2000 both closed several points below horizontal resistance while clearly in the area of resistance. The markets are still clearly in the area of resistance and can either continue moving higher on Monday or pause after Friday’s big rally.

If the DJIA breakout holds look for the other indices to follow. Also the Dow chart pattern is forecasting a price target of 13,750 if this is a successful breakout.

Many individual stocks had large moves on Friday. Friday’s Action

Friday, April 18, 2008

Dow Breaking Resistance

All four indices are higher. The Dow is through resistance and the S&P, Nasdaq and Russell 2000 are approaching resistance. This could be the move in a new uptrend. We'll keep watching for the rest of the day and Monday for potential breaks in the other indices. Today's Action Moving Higher AGU, BIDU, CF, CLF, DECK, EXPE, JASO, MON, MOS, POT, GS, LEH, MER, MS, FWLT, AMZN, PCLN, GRMN

ALERT - Watch For a Resistance Breakout and Possible Change in Intermediate Term Trend

With less than 2 hours before the open on Friday the Dow, S&P, Nasdaq and Russell futures are all higher and into the area of resistance for each of these indices. Be on alert for a possible break of this area of resistance and a change of the intermediate ter trend from neutral to up either Friday or Monday. Look to trade up trending stocks or ETF's that are either bouncing off support or breaking through reistance. This is from my post on Wednesday: The next major hurdle in this market is the horizontal resistance on the DJIA at 12,750, S&P at 1,390 to 1,400, Nasdaq Composite at 2,390 to 2,430 and Russell 2000 at 720 to 730. If the indices break resistance the intermediate term trend status changes from neutral to up.

Thursday, April 17, 2008

GOOG, BIDU Jump Big in After Market Trading, Financial Stocks Rise

DJIA + 1.22, +0.01% SP500 + 0.85, +0.06% NASDAQ Comp. - 8.28, -0.35% Russell 2000 - 5.39, -0.76% Oil 114.86, -0.07 Broad indices were basically flat on Thursday. Key short term support is the mid-section of Wednesday’s large white candle. Key resistance is as we posted yesterday. Many stocks that had a strong price rise during the last few days like MON, MOS and POT pulled back today. Financial stocks were stronger. The Securities Broker/Dealer index ($XBD) rose 2.4%. Friday look for earnings before market opens on CAT, C, HON, SLB GOOG rose $76 to 525 in after market trading. The Apr 450 straddle was priced at $30.35 near the close. If GOOG trades in the morning at this price level, the Apr 450 call should have a price around $75! BIDU rose $22 or 7% in after market trading and reports earnings on April 24. Today’s Action Pulling Back AGU, BIDU, CF, EBAY, FSLR, JASO, MEE, MON, MOS, POT, MTL, SCHN, AMZN, PCLN, CSX, DE, ELN, SNDK, JCI, GILD Moving Higher CLF, IBM Breakouts DECK Moving Lower on Earnings Today UTX Moving Higher on Earnings After Market GOOG, SNDK, Moving Lower on Earnings After Market ISRG Brokerage stocks GS, LEH, MER, MS moved higher today, rising 1.8% to 4% plus. As we mentioned yesterday each of these stocks are a showing potential trend reversal patterns from down to up. Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Wednesday, April 16, 2008

Now That's a Continuation of the Support Bounce...

DJIA +256.80, +2.08% SP500 + 30.28, +2.27% NASDAQ Comp. + 64.07, +2.80% Russell 2000 + 21.33, +3.08% Oil $114.93, +1.14 new closing high The broad indices had a mega-rally today blowing through the R1, R2 and R3 resistance levels of Friday’s large black candle. Strong earnings reports from INTC yesterday and IBM after the close today suggests that the tech sector is strong and gave a strong footing to this rally. The PHLX Semiconductor Index ($SOX) rose 5.45% which is a strong confirmation of tech strength. This rally was broad with 28 of 30 Dow stocks moving higher, 97 of the Nasdaq 100 stocks up and 457 of the S&P 500 stocks gaining today. The ETF’s DIA, SPY, QQQQ and IWM gapping higher with undeniable confirmation of yesterdays hammer formations. Also if you look at the last four days they form non-idealized Morning Stars. If you were watching for hammer confirmation early in the day you had great entries early in the day. The next major hurdle in this market is the horizontal resistance on the DJIA at 12,750, S&P at 1,390 to 1,400, Nasdaq Composite at 2,390 to 2,430 and Russell 2000 at 720 to 730. If the indices break resistance the intermediate term trend status changes from neutral to up. If you have been watching our postings and entering support bounces in up trending stocks over the past couple of days, you saw some nice profits from today's strong move up. Dave’s Insight: “Stay focused and trade the Chart Signals.” Today’s Action Moving Higher AGU, BIDU, CELG, CF, CLF, DECK, EBAY, FSLR, JASO, MEE, MON, MOS, POT, MTL, SCHN, STRA, AMZN, PCLN, Support Bounces CAT, GLW, SNDK Breakouts CSX, DD, DE, ELN, IBM Moving Higher on Earnings Today JCI, JPM, WFC INTC gapped higher from last night’s earnings report Moving Lower on Earnings Today WWW Moving Higher on Earnings After Market IBM, EBAY, GILD also reported earnings AMC today Brokerage stocks GS, LEH, MER, MS along with FWLT had strong support bounces from a higher low on their respective charts, each showing signs of trend reversal. Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Tuesday, April 15, 2008

A Support Bounce - INTC Moves Big In After Market Trading

DJIA + 60.41, +0.49% SP500 + 6.11, +0.46% NASDAQ Comp. + 10.22, +0.45% Russell 2000 + 5.99, +0.87% The broad indices moved higher today forming a potential higher low in between the 38.2% and 50% Fibonacci Retracements levels of the move from March 10 to April 7. The rally did not penetrate the R1 (resistance) mid-section of Friday’s large black candle. Stay focused on the charts to see if the market continues its support bounce tomorrow. DJIA, S&P, Nasdaq and Russell futures are up in after market trading. I suspect this is in response to INTC moving up over 7% also in after-market trading on a positive earnings announcement after the close. INTC is a member of the DJIA and is a bellwether for the semiconductor industry. The ETF’s DIA, SPY, QQQQ and IWM did not form Morning Stars today but all four did have hammer formations today. Watch for confirmation on Wednesday and trade accordingly. Since earnings season is here I will be highlighting stocks that have notable price action as a result of earnings announcements for the next two to three weeks. This will be in addition to stocks that I am currently watching. So stay tuned for some exciting developments. Today’s Action Moving Higher on Earnings Today ADTN, IIIN, INFY, MTB Moving Down on Earnings Today FRX, STT Big Moves From After Hours Earnings BMI, INTC Stocks Moving Higher AGU, EXPE, FSLR, JASO, MEE, MOS, POT, SCHN, Stocks Pulling Back BIDU, CF, CLF, MON, MTL, PCLN Stocks Moving Lower AMZN, DECK, GRMN, UAUA Brokerage stocks GS, LEH, MER, MS along with FWLT moved slightly higher today after several down-trending days Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Monday, April 14, 2008

DJIA - 23.36, -0.19% SP500 - 4.51, -0.34% NASDAQ Comp. - 14.42, -0.63% Russell 2000 - 2.09, -0.30% The DJIA, S&P, Nasdaq Composite and the Russell 2000 all formed a lower high and a lower low today as well as a close below their respective 30 DMA. This is to be expected in a short term down trend; our trend status since Friday. As a reminder all four indices are also below their 200 DMA. The 200 DMA gives us a sense if the overall tone of the index is positive or negative. The tone is not to be confused with the trend. A trend reversal can start below the 200 DMA and a strong up trend will not stay below the 200 DMA for long. Earnings start in earnest on Tuesday…know when you positions are reporting earnings and trade accordingly. Today’s Action HES symmetrical triangle breakout on more than double average volume. Earnings are scheduled for April 30. Big Positive Moves today in AGU, CF, CLF,FSLR, JASO, MON, MOS, POT AAPL found support and rose 64 cents, today is the low day in this pullback Index ETF’s DIA, SPY, QQQQ, IWM moved lowed and each are forming a potential Morning Star pattern, tomorrow will show if they rise to complete the pattern Brokerage Stocks GS, LEH, MER MS moved lower Moving Higher AGU, BIDU, CELG, CF, CLF, DECK, EBAY, EXPE, FSLR, IBM, JASO, MEE, MON, MOS, POT, SCHN, SLB, UAUA, X Pullbacks FAST, BBBY, CHL, DE, MTL, NKE, RIMM, STLD, STRA Moving Lower FWLT, FXI, ISRG, LFC, PTR, AMLN, GRMN, SBUX Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Saturday, April 12, 2008

Markets Break S1 Short Term Support Level In A Big Way

DJIA -256.56, -2.04% S&P 500 -27.72, -2.04% NASDAQ Comp. -61.46, -2.61% Russell 2000 -19.26, -2.72% We have been alerting you of both the short term support within the intermediate term sideways trend and to be aware of earnings season and its potential impact on the market. All it took was Dow bellweather GE to miss earnings estimates and lower second quarter and full year guidance for the market to roll over and and break short term support on Friday. Hmm, if there was any doubt about the significance of these factors before Friday, it should be perfectly clear now. And to think this is just the beginning of earnings season that gets into full swing next week. All four indices broke below the S1 level of last Tuesday's large white candle and the Nasdaq Composite and the Russell 2000 also fell below their S2/S3 levels. DIA, SPY, QQQQ and IWM presented bearish trading opportunities as the indices broke below their S1 support levels. Intriguingly, with more than a 2% drop in all four broad indices, all four fell to their 30 DMA and failed to break and close below. Candidly we can't remember the last time that occured on the same day. We don't know there is anything technically significant about that per se, but it is an intersting occurence. Friday's Action Moving Higher FAST moved higher on a strong earnings announcement BBBY, CF, CLF, MON, POT, UAUA, XLU Moving Down AAPL support bounce failed and moved lower PCLN ascending triangle failed and moved lower Pullbacks BIDU, CELG, CHL, DE, DECK, EBAY, EXPE. FSLR, ISRG, JASO, MEE, MOS, MTL, NKE, RIMM, SCHN, SLB, STLD, STRA, X Brokerage stocks GS, LEH, MER, MS all moved lower FWLT, IBM broke below 30 DMA Wednesday's Downtrending Stock Post AMLN, AMZN, GRMN, NTAP, SBUX, FXI, LFC, PTR all moved lower Only UAUA on this list moved higher on Friday Intermediate Term Market Trend: Neutral Short Term Market Trend: Down

Friday, April 11, 2008

Markets Break Last Tuesday's S1 Support Level

GE reported lower sales and earnings that fell below estimates and lowered it's second quarter and full year earnings guidance. The slowing economy had a negative impact on it's financial services business. This put the market on the downside from the open. All four broad indices broke below their S1 support level establish last Tuesday April 1. Unless the market has an amazing rally in the last 90 minutes, this will shift our short-term trend reading from neutral to down. AAPL's support bounce also failed to confirm today and fell below recent support. The key is to be patient and watch for the next support bounce. Brokerage stocks GS, LEH, MER and MS all moved lower today continuing their recent downtrend. We'll recap today's action after the close.

Thursday, April 10, 2008

Welcome To A Trading Range

DJIA + 54.72, +0.44% SP500 + 6.06, +0.45% NASDAQ Comp. + 29.58, +1.27% Russell 2000 + 9.04, +1.29% Broad indices bounced off support and moved higher today, maintaining the tight trading range the market has been in for the past 7 trading days. Buyers again stepped up at support and moved the market above last Tuesday’s S1 level of the large white candle. While we don’t have an intermediate term up trend on the broad market until we break above resistance, numerous leading stocks were trending higher today.

The rumor is that someone is not enjoying the trading range and it has decided to stay around until everyone gets with the program. It is what it is and you might as well focus on trending stocks and avoid the trading range stocks for now.

Brokerage stocks GS, LEH, MER, MS moved lower today Today's Action Support Bounce AAPL, CELG, CHL, DECK, EBAY, IBM, ISRG, NKE, SLB DIA, FXI, QQQQ Moving Higher MOS, POT Breakout BRCM, MTL Unconfirmed Bullish Harami AMZN, FWLT, XHB Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

AAPL Support Bounce

With 90 minutes before closing, AAPL is bouncing off support and showing a bullish engulfing pattern in an uptrend. Watch for end of day confirmation. Earnings are scheduled for release on April 23.

Markets Rally

At mid-day all broad indices are in rally mode with the DJIA up 100+ points, the S&P up 10+, the Nasdaq Composite 36+ and the Russell 2000 9+ points. All indices are above the mid-section (S1) of last Tuesday's large white candle. This rally is indicative why our trend position was only neutral last night. Support is an area of support not an exact price and yesterday's action while down was not a strong move lower. This is a bounce back into the short-term trading range and a trader's responsiblity is to continue to watch for a break below support or a breakout above resistance. This morning our attention is still focused on those stocks we have been watching this week. ETF's to Watch: DIA, SPY, QQQQ, IWM

Wednesday, April 9, 2008

Markets Move Below Daily Lows of the Last Five Days

DJIA - 49.18, -0.39% SP500 - 11.05, -0.81% NASDAQ Comp. - 26.64, -1.13% Russell 2000 - 13.54, -1.90% The broad indices fell below their lows of the last five days but rallied in the last half hour closing above their lows for the day. Both the DJIA and the S&P closed above the mid-section (the S1 level) of Tuesday’s large white candle. The Nasdaq Composite and Russell had larger pullbacks today and closed below S1. We have shifted the short-term trend status to neutral and will shift to bearish if markets move lower tomorrow. The markets look ready to move lower. Watch the price action near the mid-section of Tuesday’s large white candle for a support break. We reiterate that earnings season is upon us so be aware of when your holdings are reporting their earnings and consider that in your analysis of any new trades you are evaluating. ETF’s do offer a viable trading opportunity during earnings season because there are no earnings releases that need to be considered. Today’s Action Continuing to Rise AFL, CF, MOS, PCLN fell 5 cents POT down 26 cents JASO down 13 cents MEE down 6 cents Pullbacks ACI, AGU, BIDU, CLF, DE, EXPE, FSLR, MON, SCHN, STLD, STRA, X AAPL moved down another 1.40, continue to watch for a potential support bounce entry. NSM formed a hammer today and finished up 6 cents. Watch for a potential support bounce entry signal. Down Trending Stocks Moving Lower AMLN, AMZN, GRMN, NTAP, PETM, SBUX, UAUA, FXI, LFC, PTR BBBY fell 1.66 in the aftermarket trading after releasing earnings below estimates. Intermediate Term Market Trend: Neutral Short Term Market Trend: Neutral

Stocks To Watch

With about 45 minutes to go before the close, here are some downtrending stocks moving lower: AMZN, AMLN, BBBY, GRMN, NTAP, PETM, SBUX, UAUA, FXI, LFC, PTR

Indicies Breaking Below Daily Lows

With 90 minutes to go into today's trading session, the broad indices are breaking below daily lows of the last five days nearing the mid-point of last Tuesday's large white candle. Be sure to take appropriate action in your trading.

Indices Slightly Lower in Pre-market Trading - Stocks to Watch This Morning

Futures are down slightly in pre-market trading. Watch for a break below the short-term support levels...or a breakout through resistance...YES, you have to watch for either outcome and then trade accordingly. AGU, STLD, CF, CLF, FSLR, MON, MOS, POT, PCLN are higher in pre-market trading.

Tuesday, April 8, 2008

Five Days and Counting...

DJIA - 35.99, -0.29% SP500 - 7.00, -0.51% NASDAQ Comp. - 16.07, -0.68% Russell 2000 - 0.76, -0.11% The broad indices finished lower on Tuesday, but stayed above the recent short-term daily support lows and the mid-section of Tuesday’s large white candle for the fifth straight day. Each day, since last Tuesday’s 391 point gain, the market has appeared ready to break short-term support, buying has kept the market from going lower. That buying has been in the support area of 12, 525 on the DJIA, 1,358 on the S&P, 2,338 on the Nasdaq and 706 on the Russell. As a result traders are faced with the continuing task on Wednesday of watching for either a break below support or a breakout above resistance. Again a reminder that the market is entering earning’s season. Keep this in mind as you open new trades or as you are monitoring existing trades. The consensus estimate is for earnings to be lower in the first quarter of 2008 as compared to the first quarter of 2007. Many seem to expect the market to move lower as a result. Dave’s Insight: “It is not the news, but the market’s reaction to the news that is important. However the market reacts, remember to trade the Chart Signals.” Today’s Action Continued Positive Movement ACI, ANR, AGU, CF, CLF, DE, FCX, JASO, MEE, MON, MOS, PCU, POT, SCHN, X Support Bounce AFL, PCLN (both in Ascending Triangle Chart Pattern)

Pullbacks AAPL finally cooled down and pulled back $3.05 today. Look for a potential support bounce trade to set up here. BIDU, EXPE, FSLR, NSM, STLD, STRA Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Futures Down Before Markets Opens

Dow, S&p and Nasdaq futures are down about a half hour before the open. Watch to see if the cash markets follow or prices rebound. Again stay focused on the short-term support lows from Wednesday through Friday last week and the support of the mid-section of last Tuesday's large white candle. A break below these levels would represent a change from the short-term up trend of the last few weeks. Earnings begin to trickle out this week and begin in earnest next week. Overall estimates are looking for lower earnings in the first quarter compared to a year ago. February pending home sales and FOMC Minutes will be released today. AAPL was also down in pre-market. See yesterday's and last week's posts for stocks we're watching.

Monday, April 7, 2008

Still...Holding Near Resistance

DJIA + 3.01, +0.02% SP500 + 2.14, +0.16% NASDAQ Comp. - 6.15, -0.26% Russell 2000 - 1.05, -0.15% Markets rallied Monday morning and pulled back in the afternoon to finish near unchanged. The broad indices continued trading today in a very tight range just as they have during past three trading days. The market continues to hold just below resistance. Stay focused for either a break of support or a break of resistance. Oil rose over $2 a barrel to close at 108.92. Most of the stocks we mentioned near the open in Stocks to Watch Today rose in the morning and then pulled back this afternoon. Today’s Action Positive Movement MEE, STLD, CLF, CF, MOS, AGU, BIDU, Pullbacks STRA, ANR, ACI, SCHN, FCX, PCU, FSLR, JASO Continued Positive Movement in Stocks Covered Last Week AAPL, DE, EXPE, MON, NSM, POT, X Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Markets Positioned for Potential Breakout

Equity indices start the day near resistance. A break out of resistance will represent a change in the intermediate term trend. Trade the Chart Signals and be mentally prepared for a breakout if it happens. Watch for a break of short-term support (short-term reversal) as the opposite possibility at the same time. Stocks to Watch Today and This Week Stocks that have recently broken out or are setting up for a breakout: STRA, MEE, ANR, ACI, SCHN, STLD, FCX, CLF, PCU, CF, MOS, AGU, BIDU, FSLR, JASO Earnings to watch this week: 4/10 DNA 4/11 FAST 4/24 BIDU

Sunday, April 6, 2008

Want To Understand Why Coming Soon...

Thank you for your interest. About three dozen readers expressed interest since Friday in better understanding why news can be worse than expected and yet the market react in a positive manner. Look for a post on this important insight by Wednesday... Look for our regular daily post beginning on Monday. Enjoy the weekend.

Saturday, April 5, 2008

Market Still Holding at Resistance

DJIA - 16.61, -0.13% SP500 + 1.09, +0.08% NASDAQ Comp. + 7.58, +0.32% Russell 2000 + 0.16, +0.02% Oil 106.23, +2.40, +2.31% After the worse than expected Jobs Report, before the market opened on Friday, stock prices moved slightly lower, then slightly higher and then finished very close to where they had closed on Thursday. So another economic report goes by, again not changing the intermediate term trend of the market. Overall this was a very positive week in the market with the big move on Tuesday and many individual stocks continuing higher through the end of the week. The major indices are holding just below resistance again on Friday. Stay focused for either a breakout to the upside or the bounce down from resistance. The market won’t stay here too long.

Friday’s Action AAPL continued to move higher ISRG potential support bounce setup AFL potential support bounce after return move on ascending triangle breakout Stocks Moving Higher on Thursday had mixed results on Friday with several stocks pausing after big moves and other stocks continuing to move higher IYR -1.14, -1.63% potential bearish Harami forming MON +1.51, +1.29% doji NSM -0.07, -0.35% POT +3.32, +1.92% RIMM -2.59, -2.11% a typical pause after earnings SNDK -0.63, -2.39% potential bearish Harami WYNN -3.56, -3.06% potential bearish Harami X +2.79, +2.02% Support Bounces from Thursday DE +2.74, +3.30% MOS + 10.55, 10.09% announced record earnings Unconfirmed Bearish Harami from Thursday EXPE -0.14, -0.56% JASO +3.28, +16.69% Most of the unconfirmed bearish Haramis we have posted this week have not confirmed the following day. This is a sign of short-term technical strength.

Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Friday, April 4, 2008

Markets Moving Above Tuesday's Highs

MOS surges on huge volume after reporting record earnings this morning. POT also up big, scheduled to report earnings April 23. The DJIA, S&P, Nasdaq Composite and Russell 2000 are currently trading above their highs on Tuesday. Resistance breakout?...

Want To Better Understand Why?

Would you like to better understand why news can be much worse than expected and yet the market react in a positive manner? If you would like to read why, post a comment by clicking on the comment link below and let me know that you would...if I get enough comments I will invest the time to help you better understand...if there is not a general interest on this important insight then I'll invest my time elsewhere...

Indices Holding Above Support

Fifteen minutes into this morning's session the S&P 500 and Nasdaq Composite have moved slightly positive while the DJIA and Russell 2000 are slightly lower. All are holding above Wednesday and Thursday's lows which represent the first area of short term support...

Jobs Report Worse Than Expected - Futures Up

The Jobs Report is out with a 5.1% unemployment rate and a loss of 80,000 jobs worse than the estimate of 5.0% and job loss of 40,000 jobs. And you guessed it the futures are up in pre-market trading! I discussed street reaction in detail in my audio commentary last night covering this as one of the possiblilities of a worse than expected report with a positive reaction. It will be interesting to see how the cash markets open and trade this morning. Stay tuned for more...

Thursday, April 3, 2008

Markets Inch Higher In Front of Jobs Report

DJIA + 20.20, +0.16% SP500 + 1.78, +0.13% NASDAQ Comp. + 1.91, +0.08% Russell 2000 + 1.30, +0.18% The Dow, S&P, Nasdaq Composite and Russell 2000 indices all recovered from an early sell off and closed positive for the day. After two days of profit taking and only modest pull back in prices this may be the ”pause that refreshes” before the markets move higher. However, traders must not be lulled to sleep here and continue to watch on Friday whether markets fall below the short-term support levels established on Wednesday and Thursday. The Unemployment and Non-Farm payroll numbers will be released before the market open tomorrow at 8:30 am ET. The estimate is for unemployment to come in at 5.0% up from 4.8% last month and to lose 40.000 jobs on the non-farm payrolls. Last month on March 7 the market fell 146 points when non-farm payrolls fell 60,000 against an expectation of job gains of 20,000 to 25,000. Technically, the market had already fallen over 600 points in the 6 days prior the March 7 release. So it wasn’t the jobs report that started the market lower, rather it just amplified the existing short term down trend within the intermediate term sideways trend. Interestingly enough the market bottomed on the following Monday, March 10, one trading day, after the jobs report. Tuesday, March 11, the DJIA soared 416 points after the Fed moved to add $200 billion to the financial markets. With the current market near resistance perhaps a negative surprise in the jobs report tomorrow could turn the short-term trend down while a positive surprise could propel the market through resistance. Buckle up! Today’s Action Stocks Moving Higher IYR, MON, NSM, POT, RIMM, SNDK, WYNN, X Support Bounces DE, MOS Unconfirmed Bearish Haramis EXPE, JASO Outcome of Yesterdays Unconfirmed Bearish Haramis AAPL, FXI, PCLN, SNDK, VRTX all failed to confirm today and moved higher. ISRG moved lower but found support at S1. AFL moved lower falling back into the ascending triangle but closed higher than it opened. Gapped Down AMZN, URBN Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Markets Holding Just Below Recent Highs

The DJIA, S&P500, Nasdaq Composite and Russell 2000 indices were lower in early trading but have rebounded and at mid-morning are trading just below yesterday’s close. All four made slightly lower lows in the early trading. Following yesterday’s modest pause this appears like healthy consolidation at this time. Short term profit taking is occurring without a major sell off. It is important to stay focused on the zone of support around yesterday and today’s lows for short term signs in case this pause turns into a more aggressive sell off. Oil and gold are rising in early trading. Mid Morning Action RIMM did not experience a large gap on its earnings announcement but is moving higher and breaking out this morning. Positive Movement: DE, FXI, IYR, MON, MOS, PCLN, POT, SNDK, WYNN, X Negative Movement: AMZN, URBN

Wednesday, April 2, 2008

Markets Exhale After Big Gains

DJIA - 48.53, -0.38% SP500 - 2.65, -0.19% NASDAQ Comp. - 1.36, -0.06% Russell 2000 + 1.62, +0.23% The broad market took a healthy breathier today after yesterday’s 3% plus gains. The Russell 2000 finished positive for the day, while the other three indices pulled back modestly. A number of stocks we are watching continued to move higher. We also saw the Bearish Harami and potential (partial pattern) Evening Star patterns on a number of charts today. This is not surprising with the market pausing. The job of the trader is to determine if these patterns are simply the “pause that refreshes” or if they are the beginning of a more significant pull back. So be on alert to see if the bearish Harami confirms or the evening star patterns complete. The market is in the “zone or area” of resistance and in an intermediate term sideways trend so stay focused. Dave's Insight: The market doesn't know what you're thinking. The sad part is that if it did, it would'nt care. Don't trade your thoughts, trade the Chart Signals. Today’s Action AAPL – I had commented on the Inverse Head & Shoulder pattern on AAPL in my audio comments on March 12 (the stock was 127) and gave the price target of 149 on completion of a successful breakout at 132. I mentioned the April 135 Call which at the time was 4.30. Yesterday, when AAPL reached 149, that same April 135 call hit 15.47 a gain of $11.17 or 259%. RIMM reported earnings after the close today and traded over 10 million shares in the after-market gaining $5 plus. This is a very modest move since the Call/Put Straddle was priced near 16 before today’s close. Stocks Moving Higher EBAY, EXPE, EWZ, FSLR, URBN, WYNN, X Unconfirmed Bearish Haramis AAPL, AFL, FXI, ISRG, VRTX PCLN also a Hanging Man SNDK also a Shooting Star Potential (Incomplete) Evening Star – look for potential completion tomorrow AMZN, DIA, IWM, IYR, MDY, QQQQ, SPY Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Markets Pause and Catch Their Breath

With just over two hours left in today's trading session the S&P500 +0.03% , NASDAQ Composite +0.15% and the Russell 2000 +.42% are moderately positive. The DJIA -0.28% is down slightly. This is a healthy pause after yesterday's 3% plus rise. Midday Action Positive Movement: IWM, RIMM, URBN, WYNN, XHB Remember RIMM reports earnings today after the close!

Tuesday, April 1, 2008

No Foolin' All Day Long - A Huge Short Term Trend Change

DJIA +391.47, +3.19% SP500 + 47.48, +3.59% NASDAQ Comp. + 83.65, +3.67% Russell 2000 + 22.68, +3.30% Perhaps the only April Fools joke is on those traders who fail to watch the trend and have been more bearish than the chart. I have heard many say during the past few weeks they were bearish and that the recent rally (last week) was suspect because of low volume. I heard it so loud on one day last week I actually looked at the volume on all 30 Dow stocks and found that volume that day was average to above average on more than two thirds of those 30 stocks. Let’s be very clear here the intermediate term trend in the broad market has been for more than two months and still is today sideways. With the breakout above yesterday’s high the short-term trend is now up. A change that we alerted you to watch for in last night’s post. It will take a successful breakout above the resistance of 12,750 on the Dow, 1,400 on the S&P 500, 2,400 on the NASDAQ Composite and 730 on the Russell 2000 to correctly identify the intermediate term trend as up. Don’t be caught off guard if the indices break those resistance levels in the next several trading days. In the meantime the intermediate trend is sideways. Dave's Insight: "Don't trade what the talking heads say, trade the Chart Signals." Today’s Action VRTX up another $1.52, +6.36% today URBN up $1.64, +5.23%, mentioned in yesterday’s audio comments that the Apr 25 call priced 6.45 (18 minutes prior to the close), closed today at $8.10, + 25% CAT up $1.69, +2.16% AFL up $1.87, +2.88% There were plenty of Chart Signals today and for many traders, ETF's may provide the easiest way to trade quickly on large movement days like today. You will notice several ETF's in today's posting. Be aware that with the first quarter ending yesterday many companies will be reporting their quarterly earnings over the next 4 to 6 weeks. RIMM is scheduled to report tomorrow, Wednesday, April 2.

In addition to AMZN, IBM, PCLN, PRGO posted 30 minutes before the close the following charts had signals. Support Bounce ADBE EWT EWZ FWLT MDY SHLD TSN WY Support Bounce and Breakout AIG – Inverse Head & Shoulder DIA IWM IYR QQQQ SPY WYNN Breakouts AMLN EBAY ESRX FSLR ISRG X XLI WMT 30 DMA Breakouts AXP EXPE FXI EEM EWH NVDA SNDK WFMI Intermediate Term Market Trend: Neutral Short Term Market Trend: Up

Still No Foolin' Around With 30 Minutes To Go

Today’s action appears to be no April Fool’s joke. With 30 minutes to go the DJIA is up over 360 points, the S&P 500 is up over 41 points, the NASDAQ Composite is up over 74 points and the Russell 2000 is up over 19 points. 30 Minutes Before the Close Classic support bounces include: AMZN IBM PCLN PRGO IWM DIA SPY QQQQ

No Foolin' - A Support Bounce As Markets Break Above Monday's Highs

No Foolin' around this morning! After the first hour of trading the DJIA, S&P 500, NASDAQ and Russell 2000 indices have all made higher lows and higher highs in classic support bounce moves that we alerted you to watch for in last night's post. If the first hour's higher lows and highs hold for the entire day this will represent a change in the short term down trend. Gold and the gold bullion ETF (GLD) broke support with a lower high and lower low during the first hour. First Hour Action VRTX moving higher. URBN up. CAT up. AFL up. GLD down.