The lower open in the Dow today could have been scary but at the same time the qqq’s were opening positive. This was a good indication that the markets were not turning over. Although the Dow and S&P 500 are currently not doing anything with great resiliency, they are still trading at or above the T-line. Stay long. Gold stocks and oil stocks are still acting strong.
The sideways nature of the market still persists. The Dow, transportation index, and the S&P 500 are all hovering in the T-line area, not showing any directional move one way or the other. The NASDAQ gapped down today and is currently trading just below the 200 day moving average. A close at the lower end of the NASDAQ trading range would imply the 200 day moving average was not acting as support, making the 50 day moving average as the next target. This would indicate more downside over the next few trading days. Any long positions should continue to demonstrate strength, oil stocks and mining stocks continue to act well.
After the indecisive Doji day on Friday, the markets needed to open positive today to indicate the T-line area was going to act as support. Today’s weakness indicates more downside/consolidation. However, gold has moved back up in price making the gold stocks relatively strong. Oil stocks and biotech’s continue to act well. Any long positions held in the portfolio over the next few days should be in the strong sectors. Add some short positions to the portfolio.
Nothing wildly exciting in the market trend, making the existing slow uptrend is still in progress. Profit-taking should be expected, but as can be seen, profit-taking continues to occur intraday. Usually selling early in the day, followed by buying in the afternoon. Note that the 3T line is acting as the uptrend support.
Well, if there were any doubts about the Oil recovery, hopefully those have been put to rest. We initially called out $37.09 (on the Crude Oil Futures contract) as the trigger level that confirmed the recovery in Oil was underway. That was back in early March, six weeks and 12% worth of gain ago.
And it is highly likely to continue up to the projected levels of $63 – $84. It won’t go straight up, but the Technicals are clearly pointing to those levels through this year and next.
We called out a few potential Oil trades as this was playing out;
WLL: Initial entry was $8.57, Initial stop of $3.33, target of $17.25. We got an entry on that and it is now at $10.84, a 26% profit so far! It is on its way to the target and stop has been raised to $6.56. Very nice!
USO: Entry was at $10.25, initial stop at $8.13 and a target of $15.75. We got the entry and are at 2% profit with the projection still looking great.
TOO: Entry was at $6.79, initial stop at $2.62 with a target of $16.09. We got our entry and current price is $6.82, a profit of 2% so far. Stop has been trailed up to $4.73.
These trades still look great and there is a high probability of them hitting the targets for really impressive profit. Enjoy this complimentary video on Projecting Price Targets.
If you like these updates on Oil and the specific trades, be sure to let us know and we will continue to provide updates.
The market uptrend is still not demonstrating any exuberance. The Dow is trading positive while the NASDAQ is trading relatively flat. The transportation index is showing good strength today, setting up for a J-hook/wave three potential. Overall, this illustrates there is not any great change of the current bullish sentiment.
The big talk this morning is the lower crude oil prices based on the DOHA meeting. Note, however, crude oil prices are trading above where they opened. This is a sign that there is not any great mass selling of crude oil. After opening lower this morning, the indexes are now trading positive, keeping in the same mode that has existed in the uptrend for the last two months. The prognosis remains the same, as long as the indexes remain above the T-line, the uptrend remains in progress.
The markets are not in any hurry to do anything today, it is a Friday. As long as the indexes remain above the T-line and not demonstrating any severe sell signal, consider the uptrend remaining in progress. These market conditions still make specific sectors the strong sectors/weak sectors. Today’s trading make playing golf or going fishing the prudent strategy.
The morning indecisive trading is not on next acted after two good solid days in the market indexes. The general prognosis should be the markets getting back up into the trend trajectory of the previous two months after last week’s consolidation. As long as the indexes are now trading back up above the T-line, assume the uptrend remains in progress. However, there will be strong bullish sectors as well as bearish sectors in the slow uptrend the market. Stay predominately long but have some short positions in the portfolio.
The Dow formed an inverted hammer/Doji on Friday, which brought it back down below the T-line. The trend was going to move in the direction of how they open the markets today. Currently, as seen, the bullish trading has brought the Dow and S&P 500 back up above the T-line creating a morning star signal. It will be important to see the indexes closing above the T-line today. The strong sectors remain the gold and crude oil areas. Numerous stocks are trading up off major support levels with good candlestick buy signals today, but once again it remains very important to see bullish sentiment going into the close.