May 25th Daily Market Comments

The Dow is producing the strongest bullish reversal prospects PROVIDED the Dow closes near the high end of the trading range. The other indexes are trading positive but below the T line. Be prepared for a reversal but give it to the end of the day.


May 24th Daily Market Comments

The T line rule remains in effect! Until you see a candlestick reversal signal and a close above the T line, assume the downtrend remains in progress. That is why it was important to see what the premarket futures are indicating today. Stay predominately short. Any long positions require convincing bullish evidence to stay long.

May 23rd Market Direction

The market trend is in a transition stage. Today’s positive trading in the indexes provided the possibility of a market trend reversal. However, the full confirmation of a change of investor sentiment requires witnessing candlestick reversal signals in the indexes and a close above the T line. As illustrated, potential reversals have occurred over the past few weeks with candlestick buy signals and closes above the T line, but they did not confirm the signal the next day, closing the indexes back below the T line. This is very important for analyzing what is occurring in investor sentiment. These market conditions allow for analyzing individual chart patterns to recognize which down trending stocks remain in progress and which stocks have produced bullish confirmation. This is what puts the probabilities greatly in the candlestick investors favor.

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Stephen Bigalow

May 23rd Daily Market Comments

Although the Dow is trading much higher, the other indexes do not appear to have the same follow-through strength. The reminder remains that as long as the indexes continue to trade below the T line, bearish sentiment is still in control. Any entry into long positions require confirmation of the bulls maintaining the position going into the close. Retail stocks continue their downtrend.


May 20th Daily Market Comments

If the markets open positive in a downtrend, does that mean a reversal is occurring? Watch the 10 minute chart. That will indicate whether there is continued buying after the open. The fact that the indexes continue to trade below the T line should be the first mental input as far as evaluating whether a positive open is merely a bounce or if the bulls are actually returning.

May 19th, 2022 Stock Chat with Guest Speaker Christian Bose

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May 19th Market Wrap-Up

Option put spreads appear to be the best strategy in these market conditions. The indexes continue to trade lower, staying below the T-line. Option put spreads allow for taking advantage of continued down trending stock positions even after extended down moves. All the indexes currently are trading below the T line and have not shown any evidence of candlestick reversal signals. The trading strategy remains the same, stay predominately short but there are some good bullish sectors in progress. The lithium mining stocks are trading stronger and the energy stocks continue their uptrend. This allows investors to have both long and short positions in the portfolio.


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Good Investing,

Stephen Bigalow.

May 19th Daily Market Comments

Assume the downtrend remains in progress as long as the indexes continue to trade below the T line. Stay predominately short until there is evidence of a strong candlestick reversal signals in all the indexes.


May 18th Daily Market Comments

Yesterday the Dow formed a McMuffin signal, closing above the T line, a very strong reversal signal. So what was the next requirement? Bullish confirmation! Obviously that has not occurred. What is the current trend analysis? The downtrend resistance level has not been breached and if the indexes close at the low end of there trading range, they will be closing back below the T line. This indicates the downtrend remains in progress.


May 16th Daily Market Comments

The markets remain in a tentative state. The bullish reversal signals of Friday still require the indexes to close above the T line. Until that happens, any new positions added to the portfolio should have very close stops. The T line is a very effective indicator of when investor sentiment has changed.