The Doji that formed in the Dow yesterday created the suspicion that profit-taking/consolidation was likely to occur Today. Currently the Dow has pulled back to the T-line, not yet confirming any major reversal in the markets. Also, the NASDAQ has sold off hard, creating the potential of a bearish best friend signal if the 50 day moving average does not hold in the NASDAQ. The T-line remains a critical indicator. Long positions that are trading below the T-line Today should be closed out. They can always be bought back if the market moves prices back up. Obviously, the short positions are working well Today.

The J-hook pattern is evident in the Dow and S&P 500. The NASDAQ is not showing the same resiliency, which is good. This indicates that the markets are not in an exuberance state. There is plenty of sector rotation. There is good profitable trades both on the bullish side as well as the bearish side. Oil stocks continue to act strong, biotech’s continue to act weak. The T-line still acts as a very vital trend indicator.

The market characteristics remain the same as the past few weeks, a slow uptrend but without any evidence of exuberance. Today’s trading shows the indexes trading mildly higher, except for the transportation index, which appears to be pulling back to test the 50 day moving average. Although the overall trend is continuing positive, numerous stocks can be seen to be taking profits and/or in sustained downtrends. The bias obviously is to the upside with short positions also in the portfolio.

The confidence to stay predominantly long in this market has been the use of a simple trend factor, the T-line. The indexes, especially the NASDAQ, have been indicating the lack of any selling pressure in the overall market. The Canadian trade news merely adds additional bullish stimulus to what had already been a bullish trend in the market. AAPL has been forming a frypan bottom over the past few weeks, AMZN supported at the 50 day moving average last week and continues to trade above the T-line. Witnessing these stocks trading in a bullish manner, acting as bellwethers in the markets, has been showing additional bullish confidence, that there is no overall selling indications in the overall market. Continue to stay predominantly long with the knowledge that there are some short positions that continue to act well.

The Dow and the S&P 500 are currently forming a left/right combo on the T-line, a strong bullish indication. The NASDAQ continues it’s uptrending frypan bottom trajectory, also indicating solid bullish sentiment in the markets continue to stay predominantly long. Today NVDA has done a best friend breakout, another indication bullish sentiment is staying in the markets. Stay predominantly long, there are also good short positions available.

Today’s bullish trading continues to demonstrate the T-line acting as a relevant trend support level. It also demonstrated the NASDAQ continuing the frypan bottom pattern and remaining above the T-line. Potential trade wars, Supreme Court judge hearings, excessive political rhetoric from Washington DC does not appear to be affecting investment decisions. What could’ve been a viable change of investor sentiment after yesterday’s trading closing the indexes in the T-line area has been negated, demonstrating the uptrend remains in progress. Continue to hold long positions that remain above the T-line as well as maintaining short positions that continue below the T-line. Very simple trading strategy.

Today’s positive trading, although not demonstratively strong continues to indicate the T-line acting as a support level. The NASDAQ is setting up as a Frypan bottom, implying a slow steady uptrend for the near future. The S&P 500 and the Dow are still trading above the T-line not showing any severe selling pressure. The slow uptrend’s of the market continue to make the evaluation of each individual stock chart the top priority. NFLX is doing a bullish Doji sandwich right at a breakout level. AAPL is setting up as three white soldiers at the T-line. The evaluation of the indexes as well as some of the big followed stocks make the prospects of a continued uptrend very likely.

The lack of movement in the markets today continue to demonstrate there is no major change of investor sentiment from the slow uptrend in progress. The lack of directional force in the markets, the lack of any excessive bullish strength is also demonstrating the lack of any bearish sentiment. These market conditions allow for analyzing the high profit candlestick signals and patterns with better prospects they will work effectively without any market direction offsetting the profitability of each signal or pattern.

Friday’s indecisive trading, a Doji day, in the indexes made the likelihood of profit-taking Today that much greater. The Dow actually did a Doji after gapping up slightly in the overbought condition and at an all-time high. Today’s trading in the transportation index shows a definite change of investor sentiment after the Doji/shooting star signal at the T-line on Friday followed by a much lower trading Today. The prognosis remains the same, candlestick patterns, such as the Frypan bottom pattern will likely continue in spite of the market selloff, i.e.

Although the Dow is trading at all-time highs, the NASDAQ is trading lower. This does not diminish the strength of the market, it actually reveals that exuberance has not come into the market trend. This makes for a much more solid/sustained trend movement. These market conditions continue to produce good profits on the long side as well as some good profits on the short side. Analyze each individual position on its own merits but with knowing the overall bias of the market is still in an upward direction.