Stock market status as of September 19, 2010

The stock market is still in an uptrend, as shown by the green bars.

It just sliced through the first resistance level like a hot knife through butter.

Now, the next resistance level is around 10,790

Stock market status as of September 12, 2010

The Dow Jones index is still in an uptrend.
The two red lines show possible resistance lines from the prior peaks.

Let us see what happens.

Prior Peak Trading Strategy

When a stock reaches a prior high, it faces resistance. If it can not overcome that resistance, it will go down.

Some traders use this opportunity to short the stock. However, it is a short term trade and you must be careful, because you are trading AGAINST the trend.

The stop loss is placed at the top of the top of the peak.
To short the stock, wait till the stock reaches the previous high and wait for it to have a down day, that is, the stock closes lower.

The target is two times the initial risk. Sell half when the stock reaches two times the initial risk and have a trailing stop for the remaining half.


See the following examples.

Stock market status as of September 6, 2010

The Dow Jones Index has turned bullish.
Now, there are two possibe moves on the Daily charts.






One scenario is that DJIA is forming a triangle formed by line ABCD and line 45.
So, it could go upto point C, face resistance and then turn down. So, point C is a resistance point.

Another alternative is that the average is in a parallel channel formed by line 123 and line 456. So, it is also possible that the stock can go upto point 2 and face resistance there.

So, point C and Point 2 are two important resistance points.






Let us see what the weekly charts say about the market.
In the weekly chart, the stock is still in a narrow triangle range shown by the blue lines and we can know the trend only after it breaks out. It can break out above or below the triangle.
Notice that 10,000 is a very important resistance level. If the stock goes below 10,000 and breaks the triangle, then the long term trend is downwards.

Till the breakout occurs in the upwards or downwards direction, we will be in a choppy market.

Stock market status as of August 29, 2010

The Dow Jones Index is hovering around 10,000.
It is chopping around 10,000. This is a major level.
The long term trend is still bearish.
Let us see what happens next.

Market status as on Aug 22, 2010

The Dow Jones index broke the previous support level and is now heading downwards.
Possible support level is around 10,000

Trend is still bearish.

Market status as on Aug 15, 2010

The market is still bearish, as seen by the red bar color.
It is now touching the 50 day average.

Google has turned bearish..red color bar.





Apple is already bearish.




As you can see in Apple chart, it is very choppy and so gives fake buy and sell signals. DreamTai does not work very well for choppy stocks.

One way to get round this is to use a longer time frame.

I am still doing research for handling choppy markets.

Market Status as of August 11, 2010

Today, DreamTai gave a SELL signal for the Dow Jones Industrial average.
So, the market is no longer bullish.

So far, the new version of DreamTai (version 5.02.014 under testing) has been doing great in tracking the market trend. I am looking forward to release it by September end.

Stock market status as of August 8, 2010

The trend is still bullish, as the price bars are above the 50 days moving average and are green in color.

I will keep you updated if the trend changes.

Market Status as of August 1, 2010

The Dow Jones market index is still green in color and bullish.

I will post as soon as the trend changes and color turns red.