Technical Analysis | Stock Market Timing Signals | Top Stock Picks

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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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.

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.

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.

Stocks fell sharply today in what hopefully will be a controlled consolidation but may well turn out to be the beginning of a longer pullback.  The news cited for this downturn in prices was the drop in a key measure of consumer confidence.

However, investors are also searching for evidence of fundamental strength in the overall economy and they are coming up empty handed.  The employment picture is not improving as quickly as many has hoped, home prices continue to fall, interest rate jitters have been increased as a result of the Feds latest move – overall there isn’t a lot to be excited about – and a lot of profits to capture.

But regular readers will recognize this underlying nervousness as a reflection of trading action over the last few weeks.  Prices have been rising on ever decreasing volume – an almost sure sign of big players dumping shares. 

On the monthly time frame the picture is looking like the tide is starting to turn down.  Prices really started to meet some headwind at the mid 11,000 level. 

On the weekly time frame, prices recently moved above the PSAR indicator but the balance of the technical indicators are not supporting this strength.  All the momentum indicators have appeared to stall in bearish territory and a new 2010 high appears unlikely – at least in the near future.  This could quite possibly set up a longer pullback or a renewed down trend.

On the daily chart, prices have dropped below the lows of the recent uptrend line.  Trading volume today increased from the recent 5 or 6 days of trading volume on up days.  All the momentum indicators are at bullish extremes and appear to be moving down.  Whether they progress into bearish territory or this pullback can turn into a less damaging consolidation is yet to be seen.

On the 30 minute chart you can see that most of the downturn in prices occurred in the morning hours.  The balance of the day was fairly choppy trading action with some increased selling taking place during the last hour of trading.

Trading Strategy

Prudent traders and investors should tighten stops and take profits where present.  No new long positions should be entered until this pullback demonstrates some support before a lower low is made.

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.

Stock prices rose modestly today on similar volume to yesterdays sharp price increase.

In the news today was a better than expected housing report, a mixed forecast from the Fed, and some upbeat company news.

Housing starts in January rose 2.8% to an annual unit rate of 591,000.  Surveyed economists and housing experts expected a 580,000 unit annual rate, an increase from the prior month.

The Fed released the minutes for the last policy meeting and a revised economic forecast.  Predictions that unemployment should decline only modestly over the next few years kept the lid on stock prices.

From a technical perspective the weekly stock market chart continues to build on upwards momentum while prices get closeer to moving above the PSAR indicator which is an important trend indicator.  The CCI and stochastic continued heading upward while the MACD appears to be turning the corner to increasing strength.

On the daily chart prices continued to move up from the support levels and moved through the overhead resistance at prices slightly above 11,200.  The CCI, stochastic, and MACD are all getting stronger. 

The only wild card is the decreasing trading volume that casts a shadow on the long term strength of this upwards move.

Prices on the 30 minute chart show the upward gap at the opening of the market.  Prices then consolidated at that level with the last hour of trading moving up to close near the highs of the day.

Trading Strategy:

 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.

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

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.

View our 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.