Utilizing candlestick charts helps identify whether early-morning selling is a reversal or merely profit-taking. Wednesday’s trading in the indexes was not of any great magnitude. The Dow and the S&P 500 use the 3T line for backing and filling support. At the same time, the Dow transportation index continues to trade positive. These are all indications that Wednesday’s early selling was merely profit-taking. The prognosis remains simple, as long as the indexes do not close back below the T-line, the uptrend is in progress.
The analysis remains the same, the charts indicate the uptrend should persist until the indexes reached the top of the trend channels. This would imply a few more days of upside potential. The Dow is currently trading above the 3T line which implies the uptrend is relatively strong.