Be careful! Although the indexes are trading very bullish today, the Dow is moving up without a reversal signal. The NASDAQ is currently hovering at the T line. Unfortunately, for analyzing the overall market trend, today’s positive trading is putting the index charts back into the indecisive trading mode. This is making the analysis of each individual stock/sector as the top criteria. Be alert for selling before the end of the day.

Morning Member Comments

Yesterday’s strong selling was a major reversal signal in investor sentiment. Although the indexes opened higher Today, it had to be viewed with skepticism as merely a bounce after yesterday’s hard selling. Add short positions to the portfolio, a downtrend is likely to be in progress until there is an observable bullish reversal signal.

CGIX should not be bought.

CAN can be shorted on Today’s weakness with the first target filling the gap.

FUBO can be shorted on Today’s weakness.

CRUS can be shorted with the anticipation of wave three moving prices down to the $70 level.

The magnitude of yesterday’s selling illustrated the major change of investor sentiment, this is what candlestick analysis indicates. Have the portfolio oriented toward the short side until there are buy signals and a close back up above the T line in the indexes. Mark your calendars, March 6 will be a mini training on “power trades”, utilizing convergence analysis to dramatically improve the probabilities of being in a correct trade.

Profit-taking is expected after yesterday’s big up day. The Dow and transportation index continues to trade above the T-line. The NASDAQ and the S&P 500 are trading in a sideways mode. The trading strategy remains the same, have both long and short positions in the portfolio. The stimulus package appears to be the major bullish prospect for the market indexes. Obviously the sectors that are going to benefit from stimulus bailout continue to act well while other sectors are being sold. The T line remains the ultimate trend indicator after candlestick bullish or bearish patterns.

The Dow continues to trade above the T-line, actually setting up a slow curve potential breakout to the upside, as long as it remains above the T line. The Dow and the transportation index up, the NASDAQ trying to show support at the 50 day moving average. The continued trading above the T line in the Dow demonstrates the lack of any selling pressure although it has revealed a lot of indecision over the past three weeks. The T line rule remains in effect, the Dow will remain in an uptrend as long as it can’t close below the T line. Note that many of the bullish trading stocks use the T line as support over the past few days when the markets are selling off. Keep safety stops in place.

The T-line rule is simple! As long as prices close below the T-line, the probabilities are dramatically strong a downtrend will be in progress. That is obviously being seen in the NASDAQ and S&P 500 today. The NASDAQ is currently trying to support at the first likely target, the 200 day moving average. The T line works just as well for indicating the direction of a price move as it does as a support level. Note the number of stocks that have come down today and hit the T line, then bounced back up. This provides good evidence that their uptrends are likely to remain in progress. The Dow continues to trade the most bullish of the indexes, indicating money is moving toward the institutional big Cap quality stocks.

The market indexes continue to reveal indecisive trading in the markets. The Dow is trading flat after opening lower. The transportation index is staying mildly positive, but the NASDAQ and S&P 500 are selling off significantly. After two weeks of indecisive trading, numerous Doji’s, the indication that investor sentiment was starting to wane is becoming more evident.

Today’s positive trading is forming potential MorningStar signals in the NASDAQ and the S&P 500. It is also producing a methods rising formation and the transportation index. The strength in the transportation index would reveal there is no consensus of bearish sentiment in the markets, merely profit-taking/consolidation. Numerous bearish charts have produced bullish confirmation signals. Continue to use the T-line as your ultimate trend indicator. The fry pan bottom patterns are still producing good profit trades, i.e. MP.