The strong sell signals that formed in the indexes on Friday, but Dow forming a bearish left/right combo, created the probabilities of more selling today. Was the magnitude of Today’s selling anticipated? No, but the strong sell signals of Friday implied there was going to be more downside. When the market/stock prices move down dramatically from a knee-jerk reaction, the 10 minute chart becomes the best time frame to see if the markets are going to bounce or continue to show weakness. That allows for closing long positions that are not showing any strength or as an aggressive trader, being ready to buy if it looks like the market and stocks stabilize and start moving back up. Currently with the Dow down 460 points, it is to early to see which direction the markets will move from here.

Although the markets are still trading above the T-line, the graphics of the candlestick charts are starting to reveal more bearish candles, meaning opening higher but closing lower. Although the trend remains above the T-line, the evidence of bearish presence is starting to reveal itself. Today’s excuse for the markets selling off after a much stronger open is one case of virus in the Chicago area. This does not make for a change of market conditions, merely an added excuse for why investor sentiment is starting to get a little bit bearish at these levels. Continue to take profits on charts that are starting to show weakness.

The markets indicated profit-taking was going to be in progress based upon the evening star signal that formed in the Dow last week. The candlestick investor has the advantage of being able to analyze whether sell signals represent a major change in the trend or merely short-term profit-taking. The early trading Today continued the selloff but the NASDAQ in the S&P 500 demonstrated the T-line was still acting as a support level for the uptrend. The Dow traded down over 200 points early in the day, well below the T-line. Although the Dow closed lower, candlestick investors could clearly see that the bulls were still in control the trend. The Dow closed above where it opened, showing buyers were still in the market. Also, it closed above the T-line along with the other indexes. There is an important statistical factor relating to the T-line. When a price/trend continues to close above the T-line, the probabilities are extremely strong the uptrend remains in progress. Candlestick signals and patterns are the graphic depiction of investor sentiment. The T-line has Fibonacci characteristics. It acts as a natural support and resistance level of human nature. When you combine the analysis of candlestick’s in relation to the T-line, you gain a very strong probability factor for analyzing trends.

Maintaining a position, even when well in the overbought condition, can be done with much more comfort knowing the uptrend continues as long as the price stays above the T-line. This is very will illustrated in the trend of AAPL. This keeps investors in a position when normal human nature wants to take profits because there are profits. The T-line is instrumental when advocating cutting losses short and letting profits run.

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Good Investing,

The Candlestick Forum Team

The Dow down, the NASDAQ up, the uptrend remains in progress, the indexes continue to trade above the T-line. Maintain long positions, the candlestick patterns are providing strong bullish opportunities, i.e. UBER J-Hook pattern. Although impeachment hearings are going on, the investment community is looking at economic factors, such as housing starts, to make their decisions.

The uptrend continues to experience profit-taking which keeps exuberance from being exhibited. Today’s lower trading in the markets, although not very aggressive, has the transportation index showing strongest selling. The trend still produces the analytical process of identifying individual stocks/sectors as the top criteria. As always, safety stops be kept in place as the trend continues will in the overbought condition.

The trend sentiment has not changed. The slow uptrend of today indicates the lack of exuberance. The slow calculated buying creates a much more solid parameter for the uptrend. Continue to stay long, utilizing each individual chart analysis as the top criteria. Numerous J-hook patterns are working very profitably. The uptrend continues until there is the appearance of a reversal signal.

Bullish investor sentiment is still obvious. Trading above the T-line makes that more apparent. The trading strategy remains the same, stay predominately long as long as each individual stock position does not show sell signals and a close below the T-line. More than likely, most bullish positions moving in a steady uptrend are showing to be in the over bought condition, so have safety stops in place. Investment decisions are demonstrating bullishness based upon economic factors versus impeachment factors.