Technical Analysis | Stock Market Timing Signals | Top Stock Picks

Stock prices gained today on the eve of the Big Report Day. 

The big report day is the monthly employment report that is scheduled to be issued about an hour before the market opens tomorrow.  There was a smaller report issued today that indicated the pace of job losses is slowing.  However, expectations are that tomorrows government employment report will show employers cut 65,000 jobs in February, an increase from 20,000 in January.

Many economists are claiming that the increase in job losses can be attributed to snow days across the country.  Even if that is true, how anyone will be able to spin a report like that as anything other than negative for the future of the economy will be interesting to watch. 

The bottom line is that an increase in job losses means less money for consumers to spend.  I wouldn’t want to predict how the market will react to whatever the report says, but I’d be willing to bet that volatility tomorrow will be high.  It might be a great day just to watch.

Many media outlets are screaming that the Dow is “positive” for 2010.  That is little solace if you bought at the “high” of 2010!   If you bought at the high so far this year you’d be underwater.  However, if the media outlets can raise some interest in buying stocks that would be great because trading volume continues to be dismal – and getting worse.  Trading volume continues to decrease on up-days, not an encouraging sign.

Prices on the weekly chart continue to approach the old high set in mid-February.  A move above this high will be important for confidence to return to this market.  The momentum indicators continue to strengthen somewhat.

On the daily chart prices appear to have stalled somewhat underneath the overhead resistance at the 11,600 level.  Breaking through this level might create some momentum to create an assault on the 2010 high mark created in January.

The MACD indicator is continuing at a high level and if you compare how long prices have been oversold on this cycle with the length of prior cycles it’s not difficult to be concerned about some sharp down days to come.

Trading Strategy:

Friday is very likely to be a high volatility day so it’s difficult to recommend a strategy until the day’s trading plays out. 

However, some guidelines can be established.

If the employment report comes out equal to or better than expected and stocks are rising above the high set in the first 30 minutes of trading then new long positions could be considered.

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 Technical Analysis, Market Timing, and Top Stock Pick posts are free on this blog but are delayed a few days. 

View information on the model stock portfolio and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

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 Technical Analysis, Market Timing, and Top Stock Pick posts are free on this blog but are delayed a few days. 

View information on the model stock portfolio and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

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The weekly trend remains up but the daily trend is starting to look a little overbought.

The weekly chart is still moving up with the momentum indicators gaining strength.  The trading volume is really going to have to pour on the steam to technically have an increase in volume if this weeks trading ends on an up-note.  If trading volume falls it could add to the uncertainty of this rally.

On the daily chart today’s trading created a topping tail candlestick.  Prices ended up close to the up sloping trend line as shown on the chart.  Prices really have not accelerated from the lower trend-line as we would like to see on a strong uptrend, so caution is still advised.  Stock prices may be encountering some difficulty breaking through the overhead resistance at around the 11,600 level.

Trading Strategy

Although the weekly uptrend is in sync with the daily uptrend, caution is advised on taking new long positions in this market.

Suggested trading strategy is to consider new long positions on market up-days. 

The momentum indicators are showing that the market is a little extended here so be careful of new positions with too much risk.

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View information on the model stock portfolio  and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

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Stocks prices rose today but gave up much of the day’s gain as the afternoon turned to profit taking.  Driving prices up today was news about company mergers and signs that Greece won’t default on its debt.

The Dow Jones Industrial average finished the day just above unchanged.  The S&P 500 index added 2 points, or 0.2%, the Nada rose 7 points, or 0.3%.  The broader measure of the stock market added a little more than 36 points for a gain of 0.32%.  The broader index is a more accurate measure of market performance.

Although March trading is only two days old, the monthly chart appears to be gaining strength.  If prices can move above the overhead resistance at the highs of last October the momentum – and trading volume – may increase.

On the weekly chart prices continue to move up from the PSAR switch of last week.  The CCI has moved into positive territory and if prices can hold here for the rest of the week the market timing signal would move from cautious to up.  All three of the momentum indicators are gathering strength.

On the daily chart, today’s trading created a topping tail which may indicate weakness in the short term.  An encouraging aspect of today’s action is the increase in volume.  Although closing well of the highs for the day, an increase in trading volume on a market up day is a welcome sight. 

The 30 minute chart shows the price increase during the opening 30 minutes of trading.  Prices then moved up until the early afternoon when sellers became more aggressive.  The last half hour of trading move prices back up modestly.

Trading Strategy

Suggested trading strategy is to consider new long positions on market up-days. 

The momentum indicators are showing that the market is a little extended here so be careful of new positions with too much risk.

Get free, no obligation access to the real-time stock charts  used in these posts.

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View information on the model stock portfolio and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

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Not much noteworthy news today but the market was ready to go up, at least for the short term.  In the news today was AIGs $35 billion asset sale, two mergers in the pharmaceutical sector, and hopes that the Greek bailout package may indeed become a reality.

The weekly stock chart appears to have resumed its upward trek.  Prices appear prepared to move above the mid-February high and also move above the psychological 11,500 level.  The CCI has moved into bullish territory and the stochastic and MACD appear to be moving up also. 

If the current numbers on the weekly chart were at the end of the trading week then the weekly chart would be even more bullish.  However, there are 4 trading days left this week and anything can happen, but for now the weekly trend and the daily trend are lining up in the upwards direction and the time is right to consider new long positions.

On the daily chart prices moved up sharply from the lower support trend-line.  Prices didn’t even stop for a breather at the old February high, or the overhead resistance at 11,400.  The momentum indicators are moving to the positive side.  The only downside is the lack of volume.

Trading volume continues to decrease.  Take this as a warning sign that this rally may be fickle.  Be ready to tighten stops and take profits, down drafts may be sharp and powerful.

On 30 minute chart prices moved up throughout the morning, paused for the balance of the day, and moved up again during the last day of trading to close at the high for the day.

Trading Strategy

Suggested trading strategy is to consider new long positions on market up-days. 

Get free, no obligation access to the real-time stock charts  used in these posts.

View the free market timing signals  ,  stock trading strategies  , and stock trading forum .

 Technical Analysis , Market Timing , and Top Stock Pick  posts are free on this blog but are delayed a few days. 

View information on the model stock portfolio and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

Sample a $1 trial of timely market timing updates and top stock picks emails sent to you after the close of the stock market on each trading day at the subscription page.

Stock prices fell this week after digesting a steady stream of worse than expected news on the economy.  It’s quite surprising that the weeks loss wasn’t larger given the constant barrage of disappointing news.  The broad market wrapped up the week losing almost 50 points or a little more than 0.42%.

Investors and traders considered dismal news on the housing market, jobless claims, durable goods orders, and consumer confidence.  During the week, concerns about Greece’s debt crisis resurfaced like the monster in a bad horror flick that comes back to life.  It appears this monster may linger for a lot longer than anyone originally anticipated.

However, we need to remember that the stock climbs a wall of worry when prices are going up.  And the fact that prices didn’t drop further this week may indicate an underlying strength that may surface soon.  It’s too early to go short, but long positions have yet to be justified.  So we’ll wait until the market comes to us with trading opportunities.

On the weekly chart prices ended the week with a bottoming tail.  Trading volume was up for the week.  So the bullishness of the bottoming tail might be considered cancelled out by the increase in trading volume on a down week.  The CCI and MACD momentum indicators are fairly flat and the stochastic has dropped.  All things considered the weekly chart is sending mixed signals.

On the daily chart today’s trading created a sort of indecision candlestick.  Prices today remained below the PSAR level which indicates that long positions are risky.  The CCI looks like it is gaining strength, the stochastic is at least holding to the current level, but the MACD is still showing overbought.

The 30 minute chart shows the choppiness of today’s trading.  Prices look a little extended to the upside and ripe for a pullback, but there is a lot of time between today and the opening of trading on Monday.  Weekend news can change the investing picture a lot.

Trading Strategy:

Traders should watch for market strength before considering new long positions.  If the market moves above the daily PSAR and continues up then long positions would be appropriate.

View the free market timing signals  ,  stock trading strategies  , and stock trading forum .

 Technical Analysis , Market Timing , and Top Stock Pick  posts are free on this blog but are delayed a few days. 

View information on the model stock portfolio  and how it grew by over 170% over the same time period that a buy-and-hold S&P 500 portfolio lost 14%.  No margin, options, penny stocks, commodities, or other high risk vehicles were used – just two well respected ETF stocks.

Get free, no obligation access to the real-time stock charts  used in these posts.

Sample a $1 trial of timely market timing updates and top stock picks emails sent to you after the close of the stock market on each trading day at the subscription page.