Stock Market Analysis

Thursday, June 29, 2006

Daily Market Comments 30 June 06 by

What a pleasant surprise! The markets surged with great amount of exerberance yesterday in a move that recovered most of the lost ground for the month. It was an extremely broadbased move that started even before the Fed release. As anticipated, the Feds could either release a good or a bad news (it used to be only bad news) and it is a good news release hinting to a pause in rate hikes that instantly brought the market to new heights. Could this be the start of a rally? It might but lets not forget that oil prices are silently on the rise in the background and the iranian issue remains unresolved. There are still much uncertainty in the background and should oil prices stay strong, we might see the markets reacting to it like it did a couple of months ago.

The surge yesterday allowed both NASDAQ and DJIA to break out of the downwards price channel that we talked about yesterday with high volume. This is an extremely encouraging sign and with the markets not nearly at overbought state, there could be more upside to come even though a few days of consolidation may be in order at these levels. Both indexes need to find their respective support levels on top of their respective 30SMA lines in order to secure their positions and this needs to be proven over the next few days.

Wednesday, June 28, 2006

Daily Market Comments 29 June 06 by

Markets staged a weak rebound yesterday regaining a little piece of lost ground. DJIA was up marginally by 0.45% and NASDAQ by 0.55% just ahead of the Fed meeting today. There are some unlikely optimism that the Fed might just call a pause to the rate hikes today and might have been the fuel to the rebound yesterday. In reality, the Fed release can go either way... they can either really call a pause or to actually hike rates higher than expected to curb the growing inflation numbers. With the economy under increasing pressure from external factors, further tightening is not surprising. As the Fed meeting is in the afternoon, early trading today may be slow with low volumes.

The market rebound yesterday was more of a neutral sideways movement rather than any significant rebound or start of any rally. Intraday prices stayed down for most of the day until a late rally during the last hours. Both DJIA and NASDAQ ended with a lower low and a lower high which casts a bearish shadow over both indexes. Of significance is that the drop of 2 days ago created in both indexes a kind of a bearish channel with the channel line limited by their 30SMA. If this price channel holds true, we may really be seeing more downside to come.

Tuesday, June 27, 2006

Daily Market Comments 28 June 06 by

Markets slipped yesterday and fell through the veil of bullishness. Markets backed down all the way to their immediate support levels with NASDAQ down 1.57% and DJIA down 1.09%. The FED release tomorrow along with the central bank's monetary policy review has created such an air of uncertainty and pressure that it is no longer easy to keep the market afloat. Oil prices are on the rise again and that serves to add fuel to fire. Big giant GM is slated to post lower sales numbers too.

Overall, the market sentiments is extremely bearish and is a good time for most traders to lay off a little until the dust settles.

Daily Market Comments 27 June 06 by

Markets were up as expected yesterday. DJIA was up 0.51% and NASDAQ was up 0.58%. Markets closed without much excitment as the day of the FMOC meeting draws near. It sure seem like the markets have shaken off the effects of oil prices as the rise in oil price did not seem to affect the market at all unlike how it did last month. Looks like the only event that can move the markets now is the FOMC release this Thursday.

Technically, the bullishness in the market persists with DJIA holding strongly at the 11,000 level and NASDAQ going into a bull flag formation.

Monday, June 26, 2006

Daily Market Comments 26 June 06 by

The markets ended in an encouraging looking "down day" last Friday. Even though markets were down last Friday, there was a lot of bullishness in that move which makes it look more like it is getting ready to rocket upwards. Advancers and decliners were almost equal which is very unlikely in a bearish market. Markets also closed higher than the low of the rally last Wednesday preserving the bullish sentiment. If the patterns of last week is anything to depend on, today, we may see some more upside coming. This week, the Fed will make their announcement on Thursday and even though we all know that a rate hike is certain, we cannot bet on the fact that is will not move the market downwards when it happens.

Thursday, June 22, 2006

Daily Market Comments 23 June 06 by

Markets were down yesterday with DJIA down 0.54% and NASDAQ down 0.85%. So, is this a "Breather" or is this a "Beating"? I would say at this point of time that although NASDAQ surrendered most of its gains from 2 days ago, the markets are taking more of a breather right now with DJIA looking much stronger than NASDAQ. Markets started to make a slow and gradual recovery off their lows after mid day in a move that lasted the rest of the trading day which is a very encouraging sign. No matter how encouraging, we still need the market to make a more definitive move to upside today before we can say that a rally is indeed possible.

Wednesday, June 21, 2006

Daily Market Comments 22 June 06 by

Well well, what a pleasant surprise. Markets were up yesterday with significant strength and breadth. DJIA was up 0.95% and NASDAQ was up an impressive 1.62%. In a single day, NASDAQ has recovered its losses for the week and DJIA moved on upwards to make a new 2 weeks high. Technically, we see that both indexes have definitely found its bottom. The only question that remains is whether they will continue to rally from here or will they linger around this point for a while?

Tuesday, June 20, 2006

Daily Market Comments 21 Jun 06 by

Markets ended sideways yesterday with DJIA closing up marginally by 0.30% and NASDAQ down marginally by 0.16%. Breadth reading reflect the same neutral sentiment with decliners leading advancers very marginally. Market momentum is still inclined to upside and gives hope that this may at least be the end of the month long drop.

Today's market need to prove its strength by following up to upside before there can be any chance of a sure rebound.

Monday, June 19, 2006

Daily Market Comments 20 June 06 by

Without much surprise, the markets corrected further under profit taking pressure yesterday, obliterating almost all of the gains from the rally of 3 days ago. DJIA was down by 0.66% and NASDAQ down by 0.92%. The drop have been broadbased and few stocks were spared. Such is the market conditions of today... if there is no display of a strong follow up to any rally, profit takers will soon rush in to bring things down to earth again.

Technically, we still see some momentum in the market to upside and that the lows of 3 days ago have not been breached. This may cast a little light to the market today, so, let's hang on and keep the faith.

Sunday, June 18, 2006

Daily Market Comments 19 June 06 by

The markets went sideways last Friday after its huge rally on Thursday. This is hardly surprising after such a strong move. Right now, profit taking pressure is in the air. With the market's slightly upwards bias, many of the traders who were hurt during these couple of weeks might be preparing to take some early profits and that could add to the uncertainty. It is definitely not surprising to see the market going sideways for a few days before making a decision to go up or down from here.

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Thursday, June 15, 2006

Daily Market Comments 16 June 06 by

Well well well, what have we been saying about a lack of a buying frenzy in yesterday's daily comments? :)

What we saw today was extremely encouraging. With DJIA rallying 1.83% and NASDAQ 2.79% and advancers leading decliners by 78% : 3%! This is truly the buying frenzy that should set the pace for a sustained rally. This could truly be the rebound that the world have been waiting for.

Not to be a wet blanket but lets look back in time to 1 June 06 when we see a similar, abeit less intense, move leading to nothing but another landslide. Would this lead to another landslide?

Both indexes have reached a resistance level established by the last support level of 11,100 and 2,160. Chances are good if these levels can be broken decisively by today.

Wednesday, June 14, 2006

Daily Market Comments 15 May 06 by

A very encouraging day at the markets indeed. Both DJIA and NASDAQ stayed up strongly along with a last hour rally to close Up 1.03% and 0.65% respectively. So, is this the accumulation that we have been waiting for so long? Well, 2 factors says that it is really less exciting than we hoped it to be... 1, Breadth reading is pretty lousy with advancers barely leading decliners. In a full blown accumulation, advancers should show significant leadership against decliners with a 70%/30% ratio at least. 2, There really isn't excitement in the markets. The beginning of any significant rally or decline in the market is usually marked by a few days of wild buying or selling frenzy. What we saw yesterday was more of a steady stream of buys that held the market up nicely. So, what does this mean? Well, this probably mean that the rally has yet to begin. Yesterday's action may set the pace for one of 2 consequences... 1, small and medium investors get encouraged by the action and jump in for the buying frenzy thereby setting the pace for the rally. 2, small and medium investors takes this chance tomorrow to take some early profits in order to cover early losses thereby setting the markets back where it started.

So, this is still a market that can go anywhere... let's still tighten our seat belts for the rough ride ahead as OEX approaches.

Tuesday, June 13, 2006

Daily Market Comments 14 June 06 by

Another bearish day in the markets. Bearish sentiments continue to dominate after a futile attempt to stay bouyant in the morning trading hours. DJIA was down 0.80% and NASDAQ down 0.90%, in a broad based move downwards. Such gradual and broadbased move downwards is certainly signature of a steady bear market. Evidently, there have been bullish forces at work trying to keep the market bouyant but to no avail. Looks like it is going to take something more spectacular to turn things around.

Monday, June 12, 2006

Daily Market Comments 13 June 2006

The markets are in a definite down trend with sell offs mainly due to widespread panic then any real fundamentals. Fear is ruling the day; Fear of recession; Fear of rising interest rates; Fear of slowing economy; Fear of inflation; Fear of rising oil prices; Fear of the coming true of the "Boom and Bust" Theory. There are simply too little positives in the background to support any possible upturn. Any upturn at these points are likely to be accumulations by speculators only to be beaten down by a rush of profit takers soon.

Overall, there are just no reasons left to be positive until the market proves itself by a definite upturn.

Tuesday, June 06, 2006

Daily Market Comments 7 June 2006

It has been a pretty promising market move yesterday made to sound much worse than it really is by the media so far. Even though the DJIA closed to the "Worst Close" since March, it has definitely shown a strong support at the 11,000 level. Furthermore, advances and decliners have started to shift favourably instead of a typical over 70% decliner stance. NASDAQ shown even greater promise with not only a favourable shift in advancers and decliners but also a strong 2,160 support and a good late day run up. Futures are also pointing up at this moment of time, continuing the end of day momentum. It could be just a matter of days before the markets could potentially accumulate strong.

Overall, the markets have been better than it was made to sound over the media and investors must not start a panic at these critical levels.

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Monday, June 05, 2006

Daily Market Comments 6 June 06

It was another disappointing day in the markets. Last week's gains were totally obliterated in a single trading day. Decliners were broadbased , putting DJIA down almost 200 points by 1.99% and NASDAQ down a terrible 2.24%. It sure looks like Iran could seriously stir up oil prices on a single comment. Good thing that oil prices settled back down near session lows when investors realised that it was merely a comment and nothing more. US economy continues to inflate like a balloon and with such a high debt gearing and a rush to pay off internationally, inflation would not look like it would slow down anytime soon. I really wonder when would everyone learn to just deal with it rather than to show their anger in the markets.

Technically, we see QQQQ back down to where it started to rise 3 trading days ago. This is again a test of the 2160 support level. We need to see a definite bounce off this level or there might be trouble. Similarly, DJIA is toying around the 11,100 support level.

Sunday, June 04, 2006

Daily Market Comments 5 June 06

The markets are still showing significant amount of strength to upside even though Friday was a neutral day. (Yes, such insignificant drop is at best a neutral move, not a downside move.) There still remained little or no definitive factors in the market to cause a decisive move in any directions and the surge in oil price last Friday did not change the fact that oil is still holding steadily below $70 a barrel.

Technically, we need to see a strong upday in the market today before we can say that DJIA and NASDAQ has broken short term resistance to upside.

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