Stocks Face a Big Test This Week – Financials * US * News * Story – CNBC.com

Shared via AddThis

The Dow Jones closed up 258.30 points or 2.94% to 9034.69

That’s the end of the bear market people. New up-trending trend lines have been drawn to show you where this new trend is heading. UP UP UP…..

After producing one of my classic bullish breakouts from bearish trend signals, the market has got stronger.

This is a great time to start looking for a bullish breakouts from bearish trend in any of the DOW JONES 30 stocks.

The Dow Jones isn’t the only market to be bullish.

FTSE

London’s FTSE was the first market to signal a bullish breakout from bearish trend on the 9th December 2009. It then had a slight reaction before continuing the new trend 4 trading days ago.

The NASDAQ and S&P 500 are following the Dow Jones

S&P 500

Here is one of the stocks from the DOW JONES 30 which has just produced a bullish breakout from bearish trend Citigroup ( C )

I was keeping a close eye on this stock at the market open, I wanted to see if it was going to open above the upper bearish trend line. I wasn’t disappointed, the  stock hit my entry price straight away so in I went, LONG Citigroup.

My LONG Entry was @ $6.85

Exit @ Not sure yet, I want to ride this stock up.

Stop @ $6.50

Happy new year to you all

The Dow Jones closed up 108.00 points or 1.25% to 8776.39

The market produced a bullish breakout from bearish trend 2 trading days ago and has now confirmed this breakout  with another fine up-day.

With support coming @ the Fibonacci 38.2% line it is looking like the end of the bear market and the start of a new uptrending market.

The lines of least resistance have been broken by two powerful up days on low volume.

When everyone is telling me that the markets are going to get worse and its the end of the world as we know it, you know we have hit the bottom.

With a couple of small SHORT losses this last month I was getting a bit worried, I thought my system was failing me.

I completed a full chart, entry and exit analysis to try to find the cause of my losses. I come to the conclusion that my entry and exits where sound enough, I followed the signals correctly but noticed my system does actually fail in two places within a bullish and bearish market.

1 : When a bull market starts to turn into a new down-trending market.

2 : When a bear market starts to turn into a new up-trending market.

This bear market gave me early signs to stand aside a few weeks ago but i didn’t see them or take notice of them. I moved the trend lines slightly and tried to continue on the SHORT side. Greed was in me. I was looking at making a killing but my stops where getting hit and I was out of the trades. Stocks where not moving in the right direction after I was getting my short buy signals (bearish rally breakout). ALARM BELLS should have been ringing, but I was still very much a bear.

I have learnt some very valuble lessons from this bear market which will help me capitalize on the up-trending market and I now feel my trading methods are complete.

The trading methods have taken me full circle, from bull market to bear market and bear market to bull market.

Here are my best entry signals in to bullish and bearish markets.

Bullish breakout from bearish trend = Long Signal

Bullish reaction breakout = Long Signal

Bullish breakout from bullish trend = Long Signal

Bearish breakout from bullish trend = Short Signal

Bearish rally breakout = Short Signal

Bearish breakout from bearish trend = Short Signal

Stay tuned and keep a close eye on the Long signals within this new up-trending market.

Happy new year everyone and what a start to the year it is going to be.

The Dow Jones closed up 184.46 points or 2.17% to 8668.39

This is where it all gets a bit interesting. A few weeks ago I posted charts saying that the bear market was over, see “I thought I was a BULL” category. I was mad with myself because I had gone a bit to early on my analysis.

I have learnt my lesson for shouting my mouth off and telling the world my thoughts. I had a load of emails from people all over the world telling me how mad I was and how could I be so stupid.

So all I am going to say here is this.

The market has produced a “bullish breakout from bearish trend” on an UP day. The downward trend has been broken. All the market has to do now is stay above the upper bearish trend line and break out above the 61.8% Fibonacci Retracement line to end the bearish trend. It looks like the bottom of the market COULD be 7500.

I dont want to get anyones hopes up yet but I like this strong breakout signal. I can see a bullish trend within these new set of signals and I will share them with you if they continue.

What a way to start the new year.

Looking at the next chart, I have connected the Fibonacci using the last rally high and low. This allows me to see if the market is going to find support @ 8086.00

If I am wrong in my analysis, which I don’t think I am. I will give away a copy of “The Trillion Dollar Meltdown” to the first person who wishes me a happy new year in my comments on this page.

Have a great and safe happy new year everyone, I look forward to sharing my thoughts with you in 2009.

The Dow Jones closed down 31.62 points or 0.37% to 8483.93

The market is moving around the upper bearish trend line with low volume. 8 trading days ago it had a weak bullish breakout.

If the market doesn’t find support at 8083.50 (chart 2) on the Fibonacci Retracement I will expect this market to fall below the last low of 7500.

I am repeating myself here from Friday’s Market Trend i know but until volume returns expect much of the same story. “sorry”.

Hi everyone, I hope you all had a great Christmas.

The Dow closed up 47.07 points or 0.56% to 8515.55

The market is bouncing around at the upper bearish trend line after hitting resistance at the 61.8% Fibonacci Retracement and making a weak bullish breakout from a bearish trend.

With momentum to the dowside I am still bearish on the market.

If the market doesn’t find support find at 8083.50 (chart 2 below) expect it to fall below the last low of 7500.

The NASDAQ closed up 5.34 or 0.35% to 1530.24

The NASDAQ hit resistance at the 61.8% Fibonacci Retracement line and then produced a bearish rally breakout 4 trading days ago. This is a bearish move within the NASDAQ market. It could find support @ 1422.73 but if it doesn’t expect this market to fall to below 1300.

The Dow Jones ended the day down 100.28 points or 1.18% to 8419.49

The market is in a bearish trend which is contained within the 8500 and 6750 price range.

The market had a weak and failed attempt at a bullish breakout from bearish trend 5 trading days ago.

3 trading days ago it produced a bearish rally breakout. (bearish move)

Volume is low and was to be expected because of the holiday season.

The market will still follow the easy route which is between the bearish trend lind lines so my thoughts are that it will continue to go down.

Looking at the next chart the Dow might hit support @ the 8062.00 mark. 

8062.00 could be a defining moment in the market. If the market breaks below this point it could fall all the way to 6750.00.

My Short Trade on AA was a 2.56% loss.

I adjusted my stop to $9.75 and it got hit.

My initial stop was at $10.00 but for some reason I adjusted it.

Entry into the SHORT was good @ $9.50

I was up a little after the first days trade which was also good. At this point my analysis for AA was right.

I had a good exit target @ 8.00

My initial stop was set @ 10.00

Was this a good move to lower my stop or have a missed a good opportunity to profit ?

I think i have missed a good opportunity to profit.

I will do an analysis on AA after the holidays. I learn from all my wins and all my losses so even though it was a loss it will be a bigger lesson from which I have learned.

Keep your losses small and let your profits run.

I am now taking a few days off and going to enjoy Christmas with my little family. I am a very happy and proud family man with the greatest wife and child in the world.

I want to thank all of you for visiting my blog since November 2008.

I have loved every minute of it and the people I have meet through emails and facebook are fantastic. Thankyou.

I want to wish you all a Merry Christmas and a happy New Year.

May the trend be with you always and I look forward to sharing with you my thoughts in The Market Trend in 2009.

Thanking you

Kevin Watson

THE MARKET TREND

The Dow Jones closed down 59.34 points or 0.69% to 8519.77

The market is again fully trending within the bearish trend lines after a failed and weak bullish breakout from bearish trend 4 days ago. It was a weak breakout because it happened on a down day.

Within the Fibonacci Retracement lines the market has found resistance at the expected 61.8% line.

My feeling is the market will keep falling.

The next test is to see if the last bearish rally had any real bite behind it and to see if the market has hit its bottom at the previous low of 7500.

Chart 2 will help us here.

On the above chart I have connect the Fibonacci to the Low and High of the last bearish rally. If the market finds support at the 61.8% line then that could signal the bottom was indeed at 7500.

I feel we haven’t hit the bottom yet. The market is trending down again within the lines of least resistance which is bearish.

In the mean time I am looking at making a small profit.

AA hit my entry target @ 9.50 so I am short this stock.

Trade Notes :

Entry @ 9.50

Exit @ 8.00

Stop @ 10.00

Expecting the stock to fall with the market, but it is holiday season so anything can happen. Place close stop.

Reasons for trade :

STOCK : Weak bullish breakout from bearish trend

Found resistance @ 61.8% Fibonacci

MARKET : Weak bullish breakout from bearish trend

Trending within the bearish trend again

Bearish rally breakout 2 days ago

Found resistance @ 61.8% Fibonacci

Running Notes :

Keep trade open because it is showing a small profit see what happens Tuesday.

Will close trade by close on Tuesday, Don’t want to hold over Holidays.

Stop placed @ 10.00

The Dow Jones closed down 25.88 points or 0.30% to 8579.11

The Dow produced a weak bullish breakout from bearish trend 3 days ago (pink arrow). We knew it was weak because it happened on a down day. Bullish moves need to happen on up days.

The market is now back within the bearish trend lines and has created a “bearish rally breakout” (green arrow). This is a strong breakout signal because it has happened on a down day. Bearish moves happen on down days.

Within the Fibonacci Retracement the market has reached the 62% extreme line. This is a signal that the market rally is under pressure and the bear trend should still continue.

Now with all things being equal in the world of market analysis and with the market now back in within the lines of least resistance, a bearish rally breakout and the extreme Fibonacci being hit, the market should start to fall again. We even had positive news in a bear market. (in a bear market positive news is ignored just as negative news is ignored in a bull market).

So is this the end of the bearish rally or is it the start of an uptrending market ?????????

Who knows.

Chart 2

On the above chart the bullish breakout from bearish trend and the bearish rally breakouts are the same as the first chart.

All I have done here is change the Fibonacci Retracement lines. I have connected the bearish rally low and high.

I am looking to see if the bear market is going to continue on its downward trend or is this the start of a new uptrending market.

If the market finds support at 62% and then produces a new bullish breakout from bearish trend on an up day and then goes higher than the last high it will be ready to go long.

Until then I am going SHORT because of the first charts down momentum signals.

AA is the stock I am going to SHORT. I know it’s christmas just around the corner, so I am looking at making a quick profit here. I don’t really want to be holding this stock over the holidays.

 AA is following the same lines as the Dow Jones chart 1.

It produced a bearish rally breakout (green arrow) on an upday (weak bear signal) then it produced a bullish breakout from bearish trend (pink arrow), but on a down day (weak bull signal).

Notes :

The stock found resistance at the 62% Fibonacci, the DOW is bearish, this stock is going down.

I will place an entry SHORT on AA when the markets open on Monday only if the stock and markets are going to open lower.

I will place a close stop @ the 62% Fibonacci retracement line.

My first target is $8.

Have a great weekend everyone and Merry Christmas

The Dow Jones closed down 219.35 points or 2.49% to 8604.99

The Dow Jones produced a breakout from a bearish trend two days ago. It wasn’t a very powerful breakout because it happened on a down day. The breakout was also on the 61.8% Fibonacci Retracement Line which is the extreme movement line.

Ideally we would have wanted the breakout to be on an upday and above the 62% retracement line.

On the plus side, the market is finding support at the Fibonacci 50% line.

I am standing aside here waiting for the signals to go short or long.

Take a look at this chart below. It is the same Dow Jones chart but I have connected the Fibonacci Retracment lines to the bearish rally high and low. This is telling me a slightly different story than the first chart. Here it is telling me that the reaction could fall to the extreme 68.2% around the 8000 point mark which basically means that for the market to continue on its upward trend it will have to find support at that 68.2% or higher.

This is silly season remember.

If you want to learn more about trend lines and Fibonacci click on the “Market Club Videos”