The magnitude of today’s selling has a very relevant factor. Although the indexes have not breached the T line to the downside, the strength of the selling clearly indicates the lack of consistency of an upward trend reversal. Although there may be an uptrend in progress, it is without any consistent bullish force. It will be important to see where the indexes close today. A close below the T-line in the Dow and the S&P 500 would create an evening star signal, making for the possibility of a bearish J-hook pattern to be forming in those indexes. This would imply another strong leg to the downside. Obviously the weakness in the markets are also attributed to the failure of crude oil prices to stay above the T line after yesterday’s bearish left/right combo. Be ready to come out of long positions if the markets close near the lower end of their trading range today.
February 2nd Daily Market Comments
The magnitude of today’s selling has a very relevant factor. Although the indexes have not breached the T line to the downside, the strength of the selling clearly indicates the lack of consistency of an upward trend reversal. Although there may be an uptrend in progress, it is without any consistent bullish force. It will be important to see where the indexes close today. A close below the T-line in the Dow and the S&P 500 would create an evening star signal, making for the possibility of a bearish J-hook pattern to be forming in those indexes. This would imply another strong leg to the downside. Obviously the weakness in the markets are also attributed to the failure of crude oil prices to stay above the T line after yesterday’s bearish left/right combo. Be ready to come out of long positions if the markets close near the lower end of their trading range today.