Futures Pointing to a Down Open

Futures are pointing to a down open this morning.  The market bias indicators are showing a bearish bias, suggesting a down day either today or in the next one to five days.  The markets remain in a sideways trend with low energy.  Seasonally many investors often anticipate a "Santa Claus" rally at this time.  However, the markets have not been following seasonal patterns so far this year.  Global economic news still have an impact on the markets as well.  I have written some addiitional posts at the following link: http://yovia.com/blogs/financialsense/ regarding the Dubai Debt as well as some comments on how retail stocks may perform this year.  You may find this of interest.

 The current market condition is very frustrating from both a swing and position trading perspective.  This is because the fundamentals are still weak and follow through on momentum price action is not consistent.  Good entry requires anticipating where a stock may go on "pre-buy" candlestick type signals.  Candlestick charts are helpful in getting a better read on the market sentiment for a stock, but takes considerable practice and review of a stock's chart to understand how the stock reacts to a particular candlestick pattern or signal.  This is where having a watchlist of stocks you follow comes in handy.

The better you understand how a stock moves the more efficient you will be in identifying buy or sell signals.  This is a useful skill for short term trading.  The challenge for many people is trying to decide which stocks to select for a watch list.  The stocks you choose will be dependent on your risk tolerance and how often you wish to trade, as well as your capital base.  As a starting point, you could build a watch list using the components of a popular index such as the Nasdaq 100 or the SP/TSX 60 for the Canadian market.  Once you have determined your criteria, you can than scan these for potential investment or trading opportunities.

Index	Change	%Change	Level	Phase
TSX	-125.75	-1.08%	11510.80	Bullish
DJIA	+22.75	+0.22%	10388.90	Bullish
Nasdaq	+21.21	+0.98%	2194.35	Bullish
SP 500	+6.06	+0.55%	1105.98	Bullish
Russell 2000	+14.01	+2.38%	602.79	Warning
NYSE	+25.66	+0.36%	7182.71	Bullish

Source: Telechart

Short Term market outlook:

Bias: Scans showing a neutral bias

Energy: weak

Primary Trend: sideways to down

Market: Trading Range

Sector	Phase
Consumer Staples	Bullish
Healthcare	Warning
Technology	Bullish
Utilities	Warning
Energy	Bullish
Financials	Warning
Industrials	Bullish
Materials	Bullish
Consumer Discretionary	Bullish

Source: Telechart