Today's shooting star signal in the Dow and transportation index illustrates the bears starting to take control. A lower open in the Dow tomorrow would confirm the trend has reversed. This does not necessarily mean a full-scale reversal, but the prospects of profit-taking back to the T line. Add the fact that the NASDAQ is still in a strong downtrend and the S&P 500 sold off hard today makes the trading strategy-oriented more toward the short side.
Remember the common sense logic of the Japanese rice traders. Where do most people buy? Exuberantly at the top! This was indicated in the gap up shooting star/Doji's in our recommendations of NUE and HZO. The gap up in the overbought area, away from the T line, was the alert for starting to take profits. Candlestick analysis provides common sense trading strategies. The probabilities are dramatically in your favor when you know what alerts to look for when taking profits. Short positions can be added to the portfolio upon weakness in the market indexes tomorrow.
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Good investing,
The Candlestick Forum team … [Read More...]
Although the Dow, S&P 500, and the transportation index continue to trade positive, the failure of the NASDAQ to close above the T line on Friday produced a warning. The nature of the market remains the same, the uptrend remains in progress but the high tech stocks of the NASDAQ are still being sold off. The strategy remains the same, have both long and short positions in place.
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The strength in the Dow and the S&P 500 continues to make candlestick pattern breakouts producing very good profits. The transportation index also is producing sectors creating good profits. Although the NASDAQ traded positive on Friday, it still closed below the T line as a Doji-type day. This would allow for the prospects of the high-tech stocks still maintaining good short profitability. There are a good number of fry pan bottom patterns in the breakout mode.JBL is producing a scoop pattern set up, this would imply a positive open on Monday producing a strong bullish move.
The mining stocks, gold, and silver, copper, steel, and iron, are all producing strong bullish patterns.TRQ, TGB, KL, CLF, SA, KGC. Copper stocks, FCX, SCCO, COPX.
Regional airlines are producing good bullish patterns, AZUL, GOL, FWRD, CPA. The steady market uptrend allows for simple scanning to find the strong stocks and sectors. A great learning high-tech product is our mousepad with 12 major signals. Keep the graphics of candlestick signals at your fingertips. Click here to view our mousepad product. … [Read More...]
Yesterday's hammer signal at the 50 day moving average in the NASDAQ gave the prospects of the 50 day moving average going to act as support, with the next target at least a bounce back up to the T line, which is exactly where the NASDAQ is trading now. The other indexes are all showing good bullish uptrending charts. If the strength continues into the close today, obviously closing out short positions is logical. It will be important to see where the indexes close today.
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May 11th Daily Market Comments
The ShootingStar failure of the Dow at the upper trend channel resistance level produced good probabilities that a reversal could be in effect. The magnitude of today's selling is the reflection of a change of investor sentiment that had already been in progress in the NASDAQ. Unless long positions are showing good strength, the Long's should be closed and more short positions added. … [Read More...]