Thursday’s indecisive trading is not unexpected after a strong week and heading into a long weekend. With the anticipation of the candlestick charts not showing any major change of sentiment today, the same strategy remains in place. Continue to stay predominantly long but also have a percentage of the portfolio in short positions.
Wednesday’s positive trading is now bringing both the Dow and the S&P 500 up above the T-line. Although the NASDAQ is trading positive Wednesday, as expected after the long legged Doji that bounced off the 200 day moving average Tuesday, it is not yet trading above the T-line. Bullish strength is still required going into the close today. Many short positions should have been closed out after Tuesday’s reversal and Wednesday’s positive confirmation. However, until there is a definite close above the T-line in the indexes, be prepared to re-short positions.