The market indexes continue to toy with the lower channel support level. Today’s gap down in the Dow after a Doji yesterday showing failure at the T-line reveals more bearish pressure, the possibility of a bearish J-hook pattern that would take the Dow down through the support level. Until there is a definite change of the sideways trend channel in the indexes, any existing positions, either long or short, can be maintained as long as they are not breaching their T-line trends. But this is probably not a market condition to be adding new long positions or short positions yet. Be patient, the market will provide trend information soon. Offsetting the Dow’s Doji gap down will require strength with Today’s trading closing near the top end of the trading range.

Although the markets have been trading positive Today, numerous stock charts have not been showing any great strength, actually trading lower. The indexes are still demonstrating the downtrending T-line continues to act as a viable factor. The prognosis remains the same, any existing positions should have good compelling bullish or bearish chart patterns. This market still does not have overwhelming bullish or bearish sentiment, sideways.

Today’s positive trading indicates the lack of overpowering selling sentiment. The support level that has been established in the indexes over the past couple of months remains intact. However, the relevancy of Today’s positive trading requires the bullish strength to maintain going into the close. Obviously, if the markets start selling off again, the downtrend resistance level of the T-line will remain a major factor. Any long positions established today require strength being maintained going into the close. Watch the T-line.

Although the markets are trading higher today, they are trading well below where they opened. The Dow actually touched the T-line at its highs so far Today and backed off from that level. It will remain imperative that the indexes remain positive. If they start trading back below yesterday’s close, the T-line is still acting as the down trending factor. Any long positions being held should have very compelling chart patterns.

The markets early morning selling has put the indexes testing the support levels and the lows of October. Until there is an observed candlestick reversal signal and the confirmation of the indexes closing backup above the T-line, it has to be assumed the downtrend remains in progress. Short positions should be maintained and long positions should have very compelling reasons to stay long. NUGT is indicating the gold sector is still maintaining strength. Until the indexes reveal whether they are going to support in this area, establishing new positions should be held off until a definite market direction can be identified.

Note that the initial buying in the Dow, S&P 500, and the NASDAQ all failed at the T line before starting to sell off. The sideways trend channel of the indexes appear to be the predominant analytical factor. This implies some more indecisive volatility as long as there is not a breach of the sideways trend channel. This will make longer-term holds, anything more than three days, hard to keep in place.

The past two trading days are a clear example of why candlestick charts are very relevant. Fundamentals do not move prices, investor sentiment moves prices. The Dow has gone from the top of its trading channel to the bottom of its trading channel in the past two trading days. On big price move days, when prices move in the extremes, the 10 minute chart becomes a valuable tool. Watch the 10 minute chart to show when investor sentiment is starting to base, as seen occurring over the past 40 minutes. Witnessing bullish signals from these levels will indicate the selling has stopped and bullish sentiment has started. It is these type of days that allow the candlestick investor to make some big profits when seeing extreme price movements reversing.

Yesterday, the Dow formed a Doji at the downtrending resistance level. This made the prospects for some profit-taking to occur today. So far, the profit-taking pullback today has used the 3T line as a support level in the Dow and the NASDAQ. The S&P 500 is currently using the 50 day moving average as a targeted support level. Numerous stocks are still trading positive today, especially the bullish Doji sandwich charts of the past few days, indicating there is not a comprehensive selling in Today’s trading, merely profit-taking. Continue to stay predominantly long. There are also short positions working well. Crude oil appears to have found a base area and starting to trade positive from that level. Watch crude oil stocks for bullish signals.

Was Today’s big positive trading in the indexes expected? Not really, but the fact that investors were still showing bullish sentiment going into the weekend implies that big money decision-makers were not concerned about tariffs talks. Fortunately, candlestick charts provide the average investor (us) with a graphic insight as to what the overall decision process is doing at any particular time. This is what provides the opportunity to be in the correct direction of a price trend with a high probability/high percentage of the time. Stay long, as long as the trading remains above the T-line. Expects some profit-taking mid day, which will make how the markets act going into the close an important message.

Although the Dow is trading slightly lower, the NASDAQ and S&P 500 are trading just slightly positive. This would indicate merely shifting of funds from sector to sector. The transportation index is showing good strength today, also an indication that there is no dramatic selling pressure in the markets.