Archives for November 2015

It should be noted that when the market indexes open higher today, they all opened at the T-line and then started selling off. Obviously this is an indication the Bulls have not taken back control. The expectation for the Dow and the S&P 500 is continued consolidation coming back to the 200 day moving average. This implies the market is not yet going to have renewed upward pressure. Continue to hold both long and short positions in the portfolio.

Today’s weakness in the markets continue to indicate consolidation versus a full-scale reversal. This is evident with the fact that the transportation index is still trading positive while the other indexes are selling off. Additionally, numerous stocks that have been trading in an uptrend are still trading positive today. These factors indicate there is not a wholesale change of investor sentiment. Have both long and short positions in the portfolio.

After the market indexes have supported above the T-line for the past six weeks, today’s bearish trading in the markets has to be watched to see where the markets close. Obviously a close below the T-line would indicate a change of investor sentiment. The likely prospect would be the Dow and the S&P 500 retracing back to the 200 day moving average to test it to see if it was going to act as support. This would imply a few days to the downside. If buying comes in before the end of the day, bringing the indexes back up above the T-line, expect the uptrend to remain in progress.

The markets continue to use the T-line as a support level. The past three days  have demonstrated consolidation, forming indecisive candlestick signals on the pullback. This illustrates the lack of decisive selling and until the indexes and close below the T-line, assume the uptrend is still in progress. The profit-taking during the uptrend makes the uptrend more solid, there is no exuberance Incorporated in this trend.

Today’s soggy trading  in the market remains consistent with the nature of the uptrend, a couple strong days up, a couple indecisive days down. The important underlying factor is that the trading continues to stay above the T-line. Until that scenario changes consider the uptrend is in progress. A close below the T-line would demonstrate a change of investor sentiment.

The nature of the market trend remains the same, backing and filling during the day but not yet any evidence of a candlestick sell signal, merely profit-taking. The underlying facet of the trend remains in progress, it continues to trade above the T-line, actually trading above the 3T-line.

The market indexes needed to open lower and trade lower today to confirm the potential candlestick sell signals that formed in Friday’s trading. The positive open indicates the uptrend remains in progress as long as the indexes continue to trade above the T line.The transportation index is in the process of forming a McMuffin pattern. If it closes near the top end of its trading range today, the implication will be for more upside in the markets.