Month: September 2011

In looking at the charts from yesterday’s trading activity, despite the approximately 140 point move higher by the Dow Jones Industrial Average, I really did not see anything with a bullish chart pattern. There were only a very small handful of stocks setting new yearly highs, and none of them looked interesting. The very vast majority of the heavy volume stocks continue to have bearish chart patterns. Really, the only stocks that look to be moving higher are…………….

A Few Thoughts Before the Open: In looking at the charts from yesterday’s trading activity I have the following thoughts on this morning’s market.

1. I think the across the board selloff in commodities is potentially signalling a decline in the economy. If we see a continued decline in commodity prices then I think there is substantial increase in the probability that the U.S. economy will enter a recession within the next 6 months.

2. Having completed my look at the individual stocks I did not see any stock setting a new yearly high with an attractive chart pattern; and the stocks with the heaviest volume all had bearish chart patterns. Not a good sign if you are looking for a market rally.

3. In looking at the charts of the various indices, I noticed that the chart of the Dow Jones Transportation Average was far more bearish than that of

A Look at Tuesday’s Activity:  The overall market was sharply higher in a broad based move that saw basically every sector index I track move […]

The overall market moved sharply higher on Monday in a broad based move that saw every index I track move higher on the day with the exception of the Semiconductors. The strongest sectors were the Banking, Insurance, Oil & Gas, Natural Gas, Chemicals, Commodities, Airlines, Broker/Dealers, Cyclicals, Transports, and Retailers. Oil was higher by $0.39 to $80.24 per barrel, and Gold was lower by $45.00 to $1,592.70 per ounce. It should be noted that Gold is lower by just over $213 per ounce in the last 3 trading days. Wheat was higher by $0.074 to $6.482 per bushel, and Corn was higher by $0.094 to $6.48 per bushel, while Soybeans were $0.016 to $12.596 per bushel.

In looking at a chart of the Dow Jones Industrial Average, I think considering the size of Thursday’s selloff, Friday’s move higher was extremely weak. Normally you would expect some form of bounce following Thursday’s move lower, and in my opinion Friday’s move doesn’t count. As I write this morning’s blog, the pre-market futures are indicating an almost 120 point jump on the open. While it might be tempting to see this……………….

The Dow Jones Industrial Average closed at 10,733.83. I have downside support at 10,719.94 If the Dow closes below this level, at any point in the next few trading days, then I see the next level of support at 10,415.54. However with the current situation we could easily move through that support level in a couple of week’s worth of trading. If that is the case, then we are looking the support levels set shortly after the “Flash Crash,” where I see downside support on the Dow Jones Industrial Average coming in at 9,686.48 I think there is a very good chance we could see the Dow break through support at 10,415.54 within the next couple of weeks, and there is good chance ………..

The Dow Jones Transportation Average: The Dow Transports closed at 4,281.16 I see upside resistance on the Dow Transports at 4,683.96 and downside support level at 4,221.60 on a closing basis. I see the Dow Jones Transportation Average continuing to move lower and test 4,221.60 on a closing basis. If downside support fails at that level, then I expect the Dow Jones Transportation Average to continue to move lower and test 4,082.51 on a closing basis…………………

In Looking at the charts from yesterday’s trading activity I have the following thoughts.

1. Despite yesterday’s relatively flat close by the major market indices, several of the various sector indices looked to be turning back to negative territory. My thoughts are that this could be a sign of things to come over the course of the next few trading days.

2. In looking at the charts of the stocks with the heaviest trading volume, the vast majority that appeared to be breaking out from their sideways trading patterns, broke to……………………………

A Few Thoughts Before the Open: In looking at the charts from yesterday’s trading activity I do not see anything that really stands out as being significant. However there are two things worth noting. The 1st being that the NASDAQ 100 ‘NDX’ looks to be stronger than the other major market indices. In comparing the charts of the Nasdaq 100 to the Dow Jones Industrial Average there appears to be a divergence in their performance over the course of the last year. However other than the fact that the Nasdaq 100 declined significantly more following the dot.com bubble bursting and therefore has a greater amount to recover, I can’t find any significance to this.