Archives for October 2015

The NASDAQ is currently approaching the 50 day moving average, a potential resistance level, with the stochastics now in the overbought condition. The Dow and the S&P 500 are trading in decisively today, making the prospects for some profit-taking on a Friday a strong possibility. Profit-taking versus a trend reversal is more likely due to the fact the transportation index continues to trade higher. Watch each individual chart closely, be prepared to take some profits.

Today’s initial trading is not showing any compelling selling, merely profit-taking with the indexes rolling back and testing the 3T-line. Assume the uptrend remains in progress without the appearance of any candlestick sell signal and continuing to trade above the T-line, as well as the 3T-line. Numerous stock charts continue to show strength, implying there is no major change of the uptrend. Stay long.

Today’s trading should be considered consolidation. The Dow is trading positive while the NASDAQ is trading negative, not illustrating any change of investor sentiment of the current uptrend. As long as the indexes continue to trade above the T-line after last week’s strong bullish candlestick reversal signals, the assumption should be the uptrend remains in progress. Currently the Dow is trading above the 50 day moving average, which had been a potential resistance level. Stay predominately long until sell signals appear.

The bullish signals in the Dow and the S&P 500 last week, the MorningStar signal followed by a bullish Doji sandwich up through the T-line makes the 50 day moving average a very high probability target. Expect another day or two of positive trading before the 50 day moving average resistance area has to be addressed. The NASDAQ, after forming a left/right combo on Friday, has shown good bullish confirmation with today’s gap up. Stay long.

Although there were strong Morning Star signals in the Dow and the S&P 500 yesterday, the T-line still is a critical factor. Numerous short charts showed potential bullish reversal signals yesterday but continue to have a difficult time getting up through the T-line. A very simple analytical tool is requiring a candlestick buy signal and a close above the T-line. Until that combination occurs, the probabilities indicate there has not been a change of the current trend. Today’s trading demonstrates the lack of conviction so far on the Bulls side, still making the T-line a relevant factor.