and The Candlestick Forum
Once again the markets are trading in the opposite direction of the previous day. Today’s positive trading still has the trading within the wedge formation in the Dow and the S&P 500. The NASDAQ is still trading in the sideways range. The wedge formation is getting towards a breaking point at the tip of the wedge. Be prepared for a strong move once a breakout occurs, either bullish or bearish. Continue to have both long and short positions in the portfolio.
The lack of direction in today’s trading is in keeping with the wedge/sideways mode of the market. Today’s excuse is that everybody is waiting for the Fed meeting. Market conditions still warrant evaluating each individual stock chart pattern on its own accord. Remain both long and short.
The indecisive wedge that is forming in the Dow and the S&P 500 continues to get thinner. These patterns will show a definite move one way or the other upon breaking out of the wedge formation. Currently maintaining both long and short positions in the portfolio is still the predominant strategy.
Today’s lack of conviction in the markets continue to demonstrate the sideways mode is still the predominant analysis. This makes each individual stock/sector the prominent criteria. Have both long and short positions established in the portfolio. The T-line remains a very relevant factor.
Unless the indexes can breakout through today’s highs, confirming yesterday’s bullish candlestick signals, the sideways trend/wedge formation starts coming back into prominence. This is not been unusual for the characteristic of the market over the past six months, a lack of definite direction. Currently the market is showing strength in very few specific sectors, biotech’s, oils.
The markets continue in their whipsaw mode but there is one relevant factor. After the breakdown in the markets following the dumpling top, the recent bounce was right back up to the T-line. Until there is a definite buy signal, and significant/obvious strength, the market still has to be considered to be in a downtrend. Be careful of today’s initial buying. Short positions still should be maintained in the portfolio.
Yesterday’s bullish harami in the Dow and the S&P 500 are showing bullish confirmation on today’s positive trading. However, both indexes are trading smack dab on the T line. This becomes an important factor. If the indexes cannot get through the T line, the Bulls have not yet taken control. There are good bullish candlestick charts continuing to work in spite of the overall market whipsaws.
Today’s buying in the indexes should be suspected as a balance. Currently, the 3 T-line is acting as a resistance level. Be cautious in buying anything today with the possibility that if the buying cannot be sustained, the bearish J-hook pattern continue.
The indexes produced indecisive trading, Doji’s, at the T-line area over the past couple of days. This provided the alert/suspicion that the Bulls were running out of steam after the bounce. Todays selling confirms the obvious failure of the T-line. If the markets close near the lower end of their trading range today, this is setting up a bearish J-hook pattern, meaning wave three to the downside will be in progress.
September 16 Daily Market Comments
Yesterday’s trading took the indexes up toward the top of the resistance levels. Today’s indecisive trading illustrates IF the uptrend is in progress, it still does not have any powerful conviction as of yet. Obviously the long positions should have more weight in the portfolio. Any short positions in the portfolio should have compelling weakness, no potential candlestick buy signals. Crude oil trading positive today is creating a bobble pattern, watch the oil stocks.