Today’s healthcare vote remains the prominent influence of the market movement. With the market not moving with any great decisiveness yet, each individual stock chart remains the predominant evaluation. Biotech stocks continue to act well. Gold stocks are attempting to hold up, oil stocks are still in downtrends. Each sector needs to be evaluated.
The market direction is definitely a function of whether the healthcare vote is going to be positive, negative, or postponed. Yesterday’s Doji in the Dow and S&P 500 occurred on a downtrending support line. Today’s positive trading has the inkling of moving back up to test the T-line. However, the reactionary move is still going to be predicated upon the number of likely votes for or against a new healthcare plan. Stay diligent.
Today’s current selling is the expected follow-through after yesterday’s bearish left right combo. The political rumblings of Washington is the main excuse. The current downtrend could take the Dow and S&P 500 and NASDAQ down to test the 50 day moving average. This would also be the approximate 50% retracement of the last trend based upon Fibonacci numbers. Expects some more downside, obviously short positions should have stronger relevance.
After opening positive today, the market indexes have sold off dramatically, creating a bearish left/right combo that needs to be acknowledged. This strong sell signal will be very relevant if the markets close at the low end of their trading range today. But keep in mind, the day is not over. A close backup above the T-line would indicate the trend is continuing the uptrend. However, even a close above the T-line but below yesterday’s close would still produce a substantial potential reversal signal, a hanging man signal. Be ready to close out long positions today unless there is a dramatic reversal in the current trading, taking the market indexes back up toward today’s open.
Today’s trading is not showing any change of investor sentiment. The Dow and the NASDAQ continue to form a slow curve/J-hook pattern illustrating the T-line is acting as the support level. Overall, there is no evidence of any selling pressure, which indicates the current uptrend remains in progress. The lack of any dramatic bullish or bearish pressure on the overall market is allowing current strong trending stocks, either bullish or bearish, to continue their trends. The predominant analysis remains staying long or staying short in trends that remain above or below the T-line.
What are the candlestick charts indicating as far as the market trend? Because we can recognize the potential of a J-hook pattern, it can be implied that investor sentiment is still relatively bullish or at least not showing any signs of bearish sentiment. Currently the indecisive trading in today’s market, although not showing any buying strength, is still not altering an observable pattern. Having this visual knowledge, witnessing the trading remaining above the T-line, allows investors to maintain and/or add bullish positions based upon strong candlestick charts. As long as the indexes remain above the T-line, the probabilities tell us the uptrend is still in progress.
What is the nature of the market trend? Although today’s trading is not showing the resiliency that was seen in yesterday’s trading, the market indexes are showing patterns that are easily identifiable. The Dow, S&P 500, and the NASDAQ are all in the process of setting up a bullish J-hook pattern. The lack of aggressive bullish sentiment on any particular day does not offset the information provided in the candlestick pattern. These candlestick signals are clearly defined in our free 12 Major Candlestick Signals. It actually illustrates there is no exuberance in this market uptrend. This creates a much more solid, less whipsawing, market trend. Continue to stay long with some short positions in the portfolio.
The T-line continues to be an important trend factor. What does it mean when the Dow is trading in decisively and sideways right at the T-line? It means the market is not moving in any great direction. Simple visual analysis reveals the NASDAQ and the S&P 500 trading backup above the T-line, waffling back and forth. The transportation index has been selling off hard for the past two weeks but trading positive today.
Today’s selling continues to demonstrate the indecisive, lack of direction of the markets that has occurred for the past two weeks. The NASDAQ had been showing bullish persistency until today’s little gap down/kicker signal. Unless the markets shows some strong bullish sentiment going into the close, investor sentiment will be proving to be turning bearish based upon closing back below the T-line. The transportation index has been the strong selling indicator for the past two weeks, keeping the other indexes from showing any dramatic bullish activity. It will be important to see how the markets close today. Closes below the T-line will indicate more potential downside with a sideways movement as the best prognosis. Be ready to close out long positions that illustrate weakness. Short positions should be acting well.
The Dow is down, the NASDAQ is up, and the S&P 500 is flat. No change of investor sentiment. The NASDAQ is the most compelling indicating the potential of a J-hook pattern with it continuing to trade above the T-line. The S&P 500 is trading right at the T-line. The Dow just slightly below the T-line. The lack of any identifiable reversal signals implies the uptrend remains in progress albeit relatively slow. This makes analyzing individual stocks/sectors the prominent analysis. Gold prices appear to be stabilizing. Shipping stocks are showing good strength today.