It would not be unusual to see a Doji day in the markets after a steady run-up in the markets. A positive or flat day in the Dow and S and P 500 would add further confirmation to the bobble pattern at the 50 day moving average. Stay predominately long. These market conditions still make individual stocks/sectors the predominant trades.
Today’s weakness continues to confirm the resistance at the 50 day moving average in the Dow, that was demonstrated by a bearish Harami. A close below the T-line in the indexes would negate the prospect of an uptrending bobble pattern and make a pullback to the bottom of the trend channel the most likely prospect. Gold stocks continue to show strength with gold prices breaking out of a wedge formation and continuing the uptrend.
The strong trading day of yesterday show the Dow testing the 50 day moving average resistance level. Today’s trading required a positive open to show there was not going to be any resistance at that level. Today’s current selling shows consolidation making the uptrend a relatively slow upward trajectory. However, these conditions do not deter the strong sectors such as the mining sector.
Today’s positive trading confirmed the double Doji pattern that was set up Friday in the Dow and the S&P 500. This makes the 50 day moving average the likely target. The NASDAQ gapped up and is trading positive after Friday’s trading supported at the T-line. Anticipate more upside but watch to see what the indexes do once they reach the 50 day moving average. Crude oil prices are up two dollars today, continuing to demonstrate support in the $30 area. Stay predominately long.
Today’s consolidation is showing the indexes, although trading lower, are trading well above the lows. The transportation index likely will consolidate back to the 50 day moving average to see if it will now act as support. Crude oil is trading back off, not yet demonstrating a downtrend anymore, merely a sideways basing zone. Gold prices are waffling today but the classic pattern still indicates more upside.
Today’s consolidation/profit-taking is not unexpected after the strong run-up over the past four trading days. Continue to maintain long positions provided they are not doing any severe selling signals. Crude oil is trading positive after a kicker signal and a Doji sandwich trading up through the T-line and today’s trading breaking the downward resistance level. Strength in crude oil should maintain strength in the markets.
The Dow and the S&P 500 are getting close to the top of the trend channel, the first obvious resistance area. The NASDAQ has been gapping up for the last couple of days, creating the potential of a scoop pattern. The transportation index has confirmed that the 50 day moving average is not going to act as resistance. Continue to stay predominately long but watch to see how the markets react once they do get to the top of the trend channel.
Although the markets had a big positive day on Friday, the indexes did not form a candlestick reversal signal. The only positive note of Friday’s positive trading is that the reversal/buying occurred at the same level as a bullish signal occurred one month ago. This makes for the prospects of a double bottom but today’s bullish trading is not being viewed as a cross the board bullish conviction. The NASDAQ has open higher but is currently trading below where it opened. The other indexes, although trading higher, are showing indecisive candle formations. The markets remain very indecisive, at best a sideways or very slow uptrending trajectory. Long and short positions still require analysis of each individual stock chart.