Friday’s trading made today’s analysis of the market direction relatively simple. After last week’s gap up in the Dow followed by a Doji/Harami, followed by lower trading on Friday but the indexes closed at or slightly above the T-line indicated what was required for Today’s open.

Yesterday’s Doji in the overbought conditions of the market indexes implied that a lower open Today would indicate profit-taking has started. It appears as if the 3T-line has acted as the pullback support for the Dow and S&P 500, the NASDAQ is use the T-line as a support. If the indexes use those levels as support, it can be assumed that today is merely a profit-taking day versus any major change of investor sentiment in the overall market trend. Stay predominantly long as long as the indexes do not always sudden fall out of bed. Obviously, any long positions recommended today should not be executed until they demonstrate bullish confirmation.

The elections apparently did not surprise anybody, the bullish direction of the markets continue. Keep watch! The Dow is currently trading at the 50 day moving average and the NASDAQ is trading up to the 200 day moving average. These levels need to be watched carefully as potential resistance levels. However, the S&P 500 has gapped through the 200 day moving average making the 50 day moving average a likely target. Obviously the bullish sentiment has come back into the markets. The doubt of the midterm elections are now out-of-the-way. Stay long until the appearance of reversal signals.

Obviously, Today’s trading is going to be very lethargic until the midterm elections are over. However, the Dow trading up 60 points and the NASDAQ doing a little J-hook pattern off the T-line demonstrate that bullish sentiment is still pervasive in this current market trend. Don’t expect any major movement today but the premarket futures will be very informative tomorrow morning. Be ready to move one way or the other.

The Dow trading higher, the NASDAQ trading lower, under the influence of Apple selling off hard Today and all the political rhetoric about the midterm elections tomorrow. Expect a lack of decisiveness in this market until both get resolved. It appears as if the Dow blue chips are a place for safe haven while the high tech stocks of the NASDAQ are still be in sold off. Logic says to use each individual chart pattern as the top analytical priority.

The strong jobs report being offset by the lack of enthusiasm from the AAPL earnings report may create a consolidation day today, Friday trading after a strong week in the markets. Continue to hold long positions that remain above the T-line. There are numerous good strong bullish charts to pick from. Stay predominantly long but expect Today’s trading to be fairly passive.

Today’s positive trading is confirming the trend being above the T-line. However, there is one minor skepticism. The Dow and the NASDAQ started showing bullish direction but without a candlestick reversal signal. The S&P 500 is coming up off a bullish Harami. Because of the lack of a strong reversal signal in the Dow and the NASDAQ, the prognosis would imply an uptrend but expect some pullback at the first signs of selling. But as long as the overall trend remains above the T-line, the analysis might be profit-taking initially back to the T-line and then watch for another bullish reversal signal. Bottom line, if you’re long, still look for some oscillation in the uptrend. In other words, be careful.

Today’s positive trading was illustrated in the premarket futures. The current trading has brought the indexes backup above the T-line, with the NASDAQ actually opening at the T-line and trading positive. This signifies the prospects of more upside provided bullish strength is maintained throughout the day and going into the close. A close back below the T-line, creating shooting star type signals, would indicate the Bulls have not taken control.

After the panic selling in yesterday’s afternoon trading was witnessed, there were numerous scenarios on how the markets open Today. A lower open followed by a huge selling or a gap down would have indicated the panic selling at the bottom. The flat open followed by bullish trading is currently creating a bullish Harami. This might show the end of the downtrend but will require bullish confirmation. But as required in yesterday’s trading, the bullish trading needs to be continuing going into the close. Any buying at these levels require nimbleness.

Today’s positive trading in the markets are helping to confirm bullish candlestick signals in the oversold area. Last week the market indexes produced a bullish Harami that was followed by a lower trading Doji. Today, bullish trading is confirming the Doji. If the markets close near the top end of their trading range today, producing a good solid bullish candle, that will produce more evidence the Bulls are starting to reengage, producing a basing area. The final bullish confirmation still requires the indexes to close backup above the T-line. Any buying in this area should be conscious of that T-line confirmation.