Archives for December 2015

Today’s selling in the markets have brought the indexes back to a potential support levels with stochastics in the over sold condition, however there has not been any indication of candlestick reversal signals at these levels. Until there is the appearance of reversal signals and confirmation, the downtrend remains in progress. The portfolio should be oriented toward the short side with any long positions remaining above the T-line.

The market trend continues to remain indecisive. The bearish factors are that the indexes are trading below the T-line. The bullish factors are bullish signals forming around the 50 day moving average/support level. Conflicting indicators provide a much more clear analysis of the visual trend of the market, sideways/indecisive. Each individual stock chart needs to be analyzed based upon its own signals/pattern.

Now can we see which direction they want to take this market? Definitely not! The sideways mode of this market is still in progress. Anticipate the sideways mode will continue until the 50 day moving average catches up. The most poignant indicator of a trend change will be a breakout, one way or the other, of the wedge formation that has formed in the indexes. The prudent strategy remains the same, have both long and short positions in the portfolio until there is a definite breakout one way or the other.

Today’s sign at the upper resistance level makes the possibility of a sideways wedge formation more pronounced. Currently the Dow and the S&P 500 are supporting right on the T-line. The magnitude of price movement in the indexes, especially the Dow, illustrate the continuation of indecisiveness between the Bulls and the bears. Whereas two weeks ago the market indexes were indecisive on a daily basis, forming Dojis, this past week has shown indecision but in a different manner, with big up days followed by big down days repeated. This demonstrates the lack of trend conviction.

Today’s bullish trading has to be watched. The indexes, especially the Dow, have bounced back up exactly to the T-line. Be careful of any selling in the markets from this point, indicating the T-line is now acting as resistance. A close near the top end of the trading range today would still reveal a sideways/wedge formation in the markets.

The selling of yesterday indicated the potential uptrend in bullish sentiment had dissipated, making the market trend more of a sideways trajectory. The excuse is that the possibility of raising interest rates is the culprit. That is the excuse, reality which is illustrated by the candlestick charts/signals reveals there is no great bullish sentiment occurring in this market for the past month. The lack of direction continues to make having both bullish and bearish positions in the portfolio the logical strategy.

The T-line remains a trend factor. Today’s trading needed to open positive and trade positive to indicate the T-line was continuing to act as a up-trending support. The uptrend remains in progress provided the indexes do not come back down through today’s open. Stay predominately long but short positions continue to act well also.

The T-line remains a trend factor. Today’s trading needed to open positive and trade positive to indicate the T-line was continuing to act as a up-trending support. The uptrend remains in progress provided the indexes do not come back down through today’s open. Stay predominately long but short positions continue to act well also.