Stock Market Analysis

Monday, November 25, 2013

What To Expect During Thanksgiving Week

Welcome to Thanksgiving week once again!

How time flies, its thanksgiving week once again and its once again time for Christmas season trading! Is "Santa Claus Rally" coming this year? Santas Claus rally is a phenomena in the stock market where the US market tends to be positive Thanksgiving through January. It has its fundamentals in dramatically increased Christmas spending and internet spending as well as a general sense of positivity around the holiday season.

In fact, the US market tends to be positive in December even through the recent stock market crash year of 2008. Hence it is no surprise that most of my Master's Stock Options Picks Subscribers are also in bullish call options positions as well, prepositioned for Santa Claus' arrival once again. Yes, the US market survived and strived against all fundamental and technical odds this year so far and there is no reason why that positivity should not carry through December once again this year.

However, I would be cautious going into next year and generally start to take profit on profitable positions coming January.

Happy holidays!

Tuesday, November 05, 2013

Dow makes Triple Top

The Dow ended down 20 points today amidst mixed economic data.

US market started out deep in the red from slightly disappointing sales data and the general sense that the market is overbought. However, sentiments took an about turn at 10am with the release of better than expected ISM services which brought the Nasdaq composite into the black and the Dow near par for the day. Bond yields were up as investors rushed back to equities on the data as the market continues to rise against all odds. Earnings season has also been quite pleasing so far, lifting the market overall with stocks posting amazing leaps on many releases. Yes, despite all the problems in the policy side, the economy and the stock market seems to be unaffected and the economic recovery environment still looks very much intact.

The more the market go against all odds, the more investors and traders trade with caution. The Dow in particular formed a disturbing triple top formation. The three consecutive tops make this pattern visually similar to the head and shoulders pattern but, in this case, the middle peak is nearly equal to the other peaks rather than being higher. This formation usually precedes an extremely significant drawdown beating the base set by all three peaks, in this case, seems like a trip down to 14,500. This pattern will be confirmed if the Dow test and breaks the 30MA. However, that didn't stop our Master's Stock Options Picks subscribers from making impressive gains this week... check it out at .

For now, the Dow remains in short term bull trend, intermediate neutral trend within a primary bull trend.