May 17th Daily Market Comments

Knee-jerk reaction or a major change of investor sentiment? That question will be best answered on what type of candlestick formation is created in today’s trading. If the trading remains toward the lower end of today’s trading range, it now becomes a Bearish Best Friend Signal in the Dow, a Doji followed by a Gap Down. The NASDAQ would be a Hanging Man Signal followed by a Gap Down. If the markets trade near the top end of their trading range Today, creating indecisive/Hammer type signals, that would reveal Today’s profit-taking was merely profit-taking. The end of Today’s trading will provide more clarity as to which individual stock charts need to be closed based upon confirmed sell signals/weakness. Today is a perfect example on how prices/trends do not move based upon fundamentals, but move based upon investor sentiment. Obviously, the fundamentals of yesterday are no different than Today. It will be important to see how the markets close Today.

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