July 31, 2007 Market Recap

I have not posted for over a week. Just being busy with work. I have been watching the markets every night though. Last week had high volume and down days. The pull back has been almost to the 50% since the March low. I would expect the Dow to drop about another 200 points before we start coming out of this down trend. If it continues drop it could go down to 12750 before it hits support. The Stochs are very oversold, I would expect a change in direction here shortly.


The same thing holds true for the S&P except it hit its 50% retracement on Monday and has made a bounce upward. The Stochs actually crossed today, so it may be a good time to buy. After so many days of being down, I am looking for a bounce back up and hitting the 50% retracement yesterday, it could be up for a bounce this week.


The Nasdaq also broke its channel. It had a very large range day today, but opened up and closed down. Very high volatility. It is about ready to hit the 50% retracement. The Stochs are once again very oversold. It should be getting ready to turn.

The Russell 2000 is the market I am going to focus more on today. We have just about totally retraced to the March lows. This will definately hit support at 760. I am anticipating that we will hit support before that. If you look at the channel that we have been in since 2004, it should pull back up to the center of that channel. I did a daily gain on the channel and it came to a gain of 14.5% / year. If I follow that through the channel has a position of 774 presently. I am expecting a bounce off of that value. That value is also close to the 377 day moving average, that if you look back over time the market bounces off of it. I picked 377 because of the long time frame of this channel and that 377 is a Fibonaci number as well. If it breaks below this channel significantly, we will no longer be in a very long term up trend. The Stocks are not oversold on the weekly time scale, but are on their way there. The dips in 2004 and 2005 were actually more oversold than present, but the Russell 2000 stayed in the channel. I would expect a bump up tomorrow.

July 18, 2007 Market Recap

Today the focus will be volume. Notice how OBV has flattened out. The down days are higher volume than the up days. Today had down day, and higher volume than average. The Moving averages on the OBV and the Volume chart shows what the average has been for the last 21 days. It gives a good estimate of the direction of the Stock market and if it is going to make higher highs. Although the OBV is above the moving average, the OBV really hasn't changed much in the past 2 months. The high is not supported by volume.

The same can be said about the S&P 500, a new high but the OBV did not really hit a new high. The down days seem to be above the moving average for volume and the up days are below the moving average.


The Nasdaq may be one that is not quite like that so it will be interesting to watch it for a while. It OBV has flattened out as well. Volume did not support the higher prices.

July 17, 2005 Market Recap

The DJIA made a new high again today, but could not stay above 14,000. The stochs are in the overbought zone again. Tomorrow could possibly be a down day. The gains the Dow has made the past few days it is time for a pullback. The S&P is having a hard time getting past the 1550 mark as well. The stochs are also in the overbought zone, and once again I would expect some pullbacks as people take profits.

The Nasdaq continues to hit new highs. The gaining of 5% in the past 5 days is a very rapid rate of gain. I would expect a pullback on the Nasdaq as well.



The Russell 2000 is still stuck in the trading range between 820 and 855 but the short term trend has been up. The lows have been higher, although new highs are not being reached yet. It appears we are in a channel, but has not broken out.

I mentioned I would look at the mid term trend. It is following the long term trend right now. There are no differences. I will look at the short term trends in the next couple of days.

July 16, 2007 Market Recap

With the latest push upwards, I redrew the trendlines from the March low and just touching the lows that have been set. This shows the major uptrends. The way I determine if the market is in an uptrend or in a downtrend is by a 3 Exponential Moving Average cross. For the major trends, the 3 time periods are 8, 21, and 55. I like these because of the correspondence to 1 month on the 21 day moving average. I will explain more about that in a different post. When the 8 day EMA is below the 21 day EMA which is below the 55 day EMA then the trend has changed to a down trend. Similarly when the 8 day EMA is above the 21 day EMA which is above the 55 day EMA then it is in a uptrend. I realize that the uptrend and downtrend come a little late that is why I will use 3 different time frames. Tomorrow I will show the mid term time frame. The DJIA could not break the 14,000 mark. It looks like this week could be a turning point for the market with it be expiration week.

Very similar with the S&P. It actually close lower today. Tomorrow will be a telling day.

The Nasdaq, I put in parallel lines to show the trendlines. Notice that it is not close to the line if you do the parallel lines. This may not be as close as it should be, but shows that it is not gaining as fast as it did originally in the trend.

The Russell 2000 has not really made a new high. With the loss today, it will be interesting to see if it can cross 855 or if it is headed back down to 820 where it should hit significant resistance. I also closed my short postion on the 870/880 July vertical call. Now I will be watching my Iron Condor that is set for August. I am just now learning how to deal with the Options risks. I did ok this on the July Iron Condor that I purchased the end of May.

July 13, 2007 Market Recap

The DJIA reached a new high, but the way the it hit resistance at 12,000 as well as support, and nothing at 13,000, I will be surprised if it blows by 14,000 as well, especially when you look at what the indexes are doing. As earnings come in we will see it the highs can be maintained.
The S&P 500 has a very similar situation.

The Nasdaq is at the top of its channel. We will see if it can stay there or if it will just drift higher of back to the middle.

The Russell 2000 is trying to make new highs. Monday will be a day to see if it will.

July 12, 2007 Market Recap

Most of the indices broke out of the consolidation range, so a new uptrend is in place. The volume also supported the move upward. There was higher volume. A new trendline has been drawn although the trendline may need to be drawn steeper.

The same thing holds true for the S&P. A new trendline for the S&P have been drawn as well.

The Nasdaq is still in its channel and moving up.
The Russell 2000 is the only one that is did not move above its high. It is getting close. I have a July vertical call spread on at 870/880, I need to decide what to do with it, being only out 7 days from expiration. I set a sell order at 860 to buy the call spread at market. I am hoping that the market will drop off some tomorrow.

July 11, 2007 Market Recap

Don't think a chart review would be real beneficial today, still in the consolidation phase, waiting for a breakout. Weaker volume than yesterday, so the bears seem to be winning right now, in a very tight race.

July 10, 2007 Market Recap

The DJIA fell today right to the middle of the consolidation phase that it had formed. If the Dow breaks either of the trendlines then it could continue for a while. The most likely way for the trend to go will be up since typically the breakout will continue the way the previous trend had been. The stochs were showing overbought on low volume so the downturn was not unexpected.
Ditto for the S&P

The Nasdaq pulled back from the solid trend. Look for the June high to be resistance around 2630. A couple more days of pull backs and we should see the stochs being oversold and a turn again.


The Russell has shown a very solid rectangle forming. It may have a very slight down channel with it. It did not go above 855. To bet off of this formation, an individual should set up a sell at 820 and a buy order at 855. The targets would be 890 or 785. Based upon a rectangle breakout.

July 9, 2007 Market Recap

The Dow Jones Industrials Average is still in the consolidation zone. It appeared to want to break out but was promptly pushed back down so the Dow only had a slight gain today. A look at the volume shows there is not a lot of support to drive the price farther up. The stochs actually crossed over today as well.
The S&P is very similar to the Dow. Still in the consolidation zone. Stochs are overbought and the gains recently have been on lower than average volume. Still expecting a turn back down.

The Nasdaq is showing the same effects as the other markets. Not much else to say.



The Russell 2000 did the same thing. It wouldn't surprise me if the Russell touched 855 and then drop back down to around 840 and then head up to 875.

I was going to add a possible swing trade but did not get any good signals to buy ones that were going up. This would be a good time to short some stocks. Since I do not have an account that I trade that allows me to short stocks I did not pick any graphs for this.

July 6, 2007 Market Recap

The Dow Jones Industrials are still in the consolidation zone. They have not broken either trendline. The last low the bulls actually one since it was a higher low than the previous one. But the bulls have not been able to make a higher high since the end of may. This consolidation could go into October when a breakout could occur. The stochs are once again in the overbought range.
The S&P 500 are very similar to the DJIA. This week could determine if the break out is real. If Monday the market drops, it could go back down to 1,500 over the next few days. It may be forming a flag, which could be a continuation flag for the overall market.
The Nasdaq is still going up. This shows the overall market is still fairly strong. It is getting close to the top of the channel and should experience a pull back back to the middle of the channel in the next couple of day or maybe even back to the lower part of the channel. The stochs are very high so expect a turn in the overall market for the short term. The long term trend is up. Expect it to continue
The Russell 2000 will be the one to watch on July 9th. If the overall market is up, it should cross the previous high of 855. That would break the resistance at 855 and could allow it to continue up to 882. With the stochs being overbought again, a pullback could be expected. Profit taking could be done. Also as we are two weeks from options expiration, we should expect some of the market makers to start pinning the market. I would not expect it to be much above 850 in the next two weeks. Expect a pull back to that level due to options expirations.

July 5, 2007 Market Recap

The DJIA is right in the middle of the consolidation phase. Until it goes above that high, I will be watching it to see which way the trend will proceed. The stochs are showing that it is going to short term overbought. Next week may see it go lower after the slow trading this week.


The S&P looks similar. The bulls brought the market back to even today. The bears thought they were winning earlier, but the bulls came back. The stochs are up in the overbought zone as well.


The Nasdaq is the interesting one. It has reached a new high the past few days. The trendline was redrawn to the low the end of June. Higher highs and Higher lows are seen. When the Nasdaq is trending better than the Dow the overall market will be up. This makes me think that we should be going higher here on all of them. It appears that there should be a short term reversal, since it would be getting close to the top of the channel.

If the Russell 2000 breaks above the 850 mark, then it could go on up. I am anticipating that the Russell 2000 could get pinned for the month around 850. It is hitting a lot of resistance there from the middle of June and now hitting it again. I am trying to learn Iron Condor Options trading as well, so I am hoping I am right.


Overall the markets are in a consolidation phase. It could drop a little bit more before the end of year gains.

June 29, 2007 Market Recap

The DOW continues in the triangle that is forming. It will be interesting to see which way it goes. It will stay in the consolidation phase probably for the next week. The high and low are about the same.
The same thing goes with the S&P.
The Nasdaq is not showing the consolidation like the other. It appeared it may be higher on Friday. We will see if it makes a higher high and then redraw the trendline.
The Russell 2000 is showing weakness. Notice how the bulls are not making newer highs.
The next couple of days, hopefully I will be able to add more to the post.

June 28, 2007 Market Recap

There is not a lot of news for this day. All of the charts are still showing consolidation. I am not going to write much about any of the charts. Just present them so they are documented.