Next week: We have a Fed meeting, a big expiration cycle for Options and Futures on Friday, plus a few economic reports.

Market commentary: The S&P and the NASDAQ did catch up to the Russell 2000 (small caps), taking out the January highs, and I expect we’ll see the DOW do the same thing this week. The indexes are all overextended in my opinion, but will remain that way till this expiration cycle is over.

New all time highs:
APPL, BIDU, MCD, NKE, DNDN, GMCR, PETS, ROST, TJX, V, among others…

(see blog below for charts and the complete review)

This post was submitted by 123trader (Richard L).

Paul Lofton’s Stock Market Commentary: Dated Saturday February 27, 2010
Disclaimer: None of the contents of this letter is investment advice! You should always consult with “your” investment professional for advice.

The week just past:
The S&P500 was down just three points on the week. At first glance this seems rather benign. A closer look at the internals of the week you’ll see some deep swoons that the market recovered from. At one point on Thursday the S&P 500 was down 23 points from the prior weeks close. This was a two percent move to the down side before a huge intra day rally on Thursday helped to recover most of the losses. It could have been a bad week. The action of last week turns out to be a set up for the coming week beginning on March 1st.

Where do we stand right now / weight of the Evidence (current technical status of the markets):
Tenuous conditions for the moment. Right now as of this writing, the market is very short term overbought and due for yet another sharp a correction.

Short Term (next week) what’s next?
I’m seeing evidence that would suggest the beginning of the week could see another deep dip before a basing and settling out. The deep dip the market experienced on Thursday of last week will likely be revisited sometime early in the coming week. Most of my technical indicators are suggesting short term trouble just ahead and then hopefully some bottoming and basing out sometime during the course of the week.

January Barometer Update:
On Friday of last week on February 26th, the effects of the third candle of the January Barometer were completed. The effects of the 4th candle of the January Barometer start on Monday March 1st. The forth candle and its effects indicate a sharp dip at some point during the effective time frame of the candle which ranges from March 1st through March 16th. When I put all the pieces of the puzzle together, I believe that in the early going of this next candle the market is likely to experience volatility to the down side, followed by a basing out period and then a sharp rally leading into the March 16th time frame. My technical indicators seem to be coinciding and lending validity to this whole thesis. It’s a good thing when several indicators come together and lend support to each other and to a central thesis.

Intermediate Term (next three to four weeks):
The next few weeks look to be overall positive when compared to where we stand right now. I see the bias as overall upward. I think when we look back at the month of March; we’ll have something to smile about. It won’t be without worry and concerns, but overall I think some gains lie ahead.

Longer Term (next few months): I am still of the opinion this market is in the process of building a long term major top. Market action going into the spring and summer months will likely seem like a roller coaster ride. I think that by the time mid summer gets here, we’ll see higher index prices. The ride will be a rough one, but I think ultimately the gains will outweigh the losses and we’ll see higher index levels and overall higher stock prices.
In summary:
If I had to put a picture on the markets near term action into words, it may go something like this. Down and base out, build an area of support to rally off from and then begin putting a rally effort together at some point during the coming week. There may not be much overall advancement in the indices for the coming week, but rest assured volatility will be very present and evident. I expect a lot risk to get wrung out of the market during the coming week which may afford some money that has been on the sidelines to ease its way into the markets. Perhaps some toe dipping will occur on the part of some. The markets seem to climb a wall of worry. There’s no shortage to things to be worried about, so bring it on and let’s get going.
Thank you and have great week. Paul Lofton, Tampa Florida / paul_lofton@yahoo.com / http://sites.google.com/site/loftonmarketcommentary/ .

This post was submitted by Paul Lofton.

the market had a followthrough day on monday and even though not every followthrough day leads to a new uptrend…..every uptrend begins with a followthrough day and this goes back to 100 years of research and examination…..the action of leading stocks have been sound and breakouts have been working …..leaders such as aapl, amzn,bidu, pcln, gmcr, vltr, ctrp, deck netl, rvbd, ffiv have been acting constructively and based on research….this the second year of a new bull market

This post was submitted by Travis Ninowsky.

Market commentary: March marks the anniversary of the market bottom last year, and although we have had a massive 70% rally, we are only 50% of the way back up to the June 2007 highs! We are two weeks away from options expiration, and with many traders short the market, I expect more upside as they run for cover. I also expect the S&P and the DOW to catch up to the Russell 2000 (small caps) and take out the January highs (see index charts above).

Some stocks hitting ALL TIME HIGHS this week:
AAPL, BIDU, DTV, DNDN, ESRX, EW, ISRG, MJN, MIL, TEVA, DLTR, ROST

ETFs hitting new all-time lows. Be careful with holding on to leveraged ETFs!
FAZ, DRV, QID, SDS, SRS, TZA

(see blog below for charts and the complete review)

This post was submitted by 123trader (Richard L).

Paul Lofton’s Stock Market Commentary: Dated Saturday February 13, 2010
Disclaimer: None of the contents of this letter is investment advice! You should always consult with “your” investment professional for advice.
On the daily charts, the 150 day exponential moving average of both the Dow 30 and the S&P500 indices were stopped in their tracks and prevented from penetrating the major support levels. This is a good thing for the time being.
Last Monday just before the market close, I decided to partially re-enter the market. This was based on the deep level of oversold conditions and the weight of the evidence being demonstrated by several of my indicators. The market took quite a beating from the top on January 14th when the S&P500 high occurred at 1150.41 down to the low of 1044.50 on February 5th. This translated into a 9.2 percent decline. I like it when the market advances and I enjoy the rallies and the potential for profit. However, when it comes to just sitting their watching an investment get gobbled up by a bunch of profit takers, you have to draw the line somewhere. That’s why we trade. The markets are free and so are we. We live in a free world and have the luxury of trading in free markets. This too is a good thing.

Presently the market remains in an oversold condition. The weekly charts when viewed through the lens of a 21/5 stochastic indicator suggests to me that the bounce we spoke about last week has only just begun. As mentioned above the 30 / 50 and 150 day moving averages provided a safety net for the indices and essentially stopped the free fall from the highs. On a weekly chart all three of these moving averages remain in an upward trajectory with the market averages resting just above them. This is a good thing and is reassuring from a technical standpoint for the time being.

Where does the market go from here? Well, I’m of the opinion that with the market being up only two days out of the past five days leaves room for more gains in the coming days. I think the risk reward ratio is stacked in favor of those who are long the market verses those who are out, or short. My indicator of indicators is suggesting that we’ve just begun to climb out of the ditch. It is also suggesting that a lot of the risk that had gotten built into the market has been wrung out. How long will the rally last? There’s always the possibility of a retest of the low put in on February 5th. We cannot rule this possibility out. I believe the bias is one of a bumpy volatile upward path towards ultimately higher index levels. One catch though, according to the January Barometer, their should be one more roller coaster low coming into existence sometime in early to mid March. Then once again according the barometer, the market will move decisively higher towards the ultimate top later in the summer. We’ll have to wait and see that if that comes to pass. We will not and do not rely on the January Barometer alone. I always rely on my bag of technical indicators for confirmation of over bought and over sold conditions and to verify all other market events. I remember a pilot / evangelistic pastor who spoke to a group of deacons at my church. He said “If you do not or cannot trust your instruments, then you should not ever climb into the cockpit of your plane.” His message was one of having and practicing faith. I don’t know why, but I’ve always remembered his words and the message to my heart and life. They seem to echo his message whenever I begin to doubt the message of the market or the message of my indicators. In life there a lot of different messages being communicated to us on a daily basis. It’s up to us to hear, interpret and apply these messages in meaningful ways.

Longer Term: I am still of the opinion this market is in the process of building a long term major top. It does not mean we are going to fall of a cliff at any moment, and it does not mean that the market can rocket higher from present levels. It’s a sort equilibrium reaching process where buyers and seller trying to establish reasonable positions that are based on individual circumstances. Thank you and have great week. Paul Lofton Tampa Florida / paul_lofton@yahoo.com / http://sites.google.com/site/loftonmarketcommentary/ .

This post was submitted by Paul Lofton.