Archives for April 2017

Today’s positive trading in the Dow is clearly reflective of the support at the 50 day moving average. The NASDAQ is still demonstrating reasonable strength, moving somewhat sideways over the past few weeks but still showing bullish signs as the trend stays within reasonable range of the recent highs. Note that today’s trading has been a very slow and consistent move to the upside, continuing to reveal there is no exuberance yet experienced in this steady uptrend. A good strategy remains having predominantly long positions in the portfolio with a few short positions.

The markets are absolutely flat. What does this tell us about investor sentiment? Usually absolutely nothing, no bullish force or bearish force. However, the lack of selling today does have some significant information. A missile launch in Syria, a terrorist attack in Sweden, much lower job numbers than expected, and this information is not creating any selling in the market. The lack of selling on potentially bad news is taking into account the overall bullish confidence that is building up in the American economy. The bullish charts are still working, the bearish charts are still working. This is why it’s important to project price targets.

The indecisive nature of the market continues, illustrated by the waffling/sideways trading of the indexes above and below the T line. Many people ask, “What does it mean when you see the waffling at the        T-line? How does that help you?” The answer is very simple. It means there is no decisive direction in investor sentiment. Candlestick charts allow you to recognize when it is time to be long or short. Candlestick charts also tell you when there is no market trend, creating a different trading strategy. Either have both longs and shorts in the portfolio, or conserve your cash until the market shows a definite bullish or bearish price move. Currently, most bullish charts are not showing any dramatic upward price move, merely slow waffling uptrends.

Yesterday’s left/right combo in the Dow, after the previous day’s hammer/Doji supported at the 50 day moving average, made for very simple trend analysis. A positive open today would be confirmation of the left/right combo. This candlestick pattern produces a very high probability trend result. The confirmation of a gap up is a very strong indication investor sentiment is ready to take the market higher provided the markets close near the high end of the trading range today. Stay predominantly long. Expect more upside.

The market indexes are obviously not going up and they’re not going down, currently the Dow is trading slightly positive while the NASDAQ is trading slightly negative. The operative word is slightly. The Dow and S&P 500 are trading between the T-line and the 50 day moving average, sideways. The NASDAQ is trading just above the T-line but has an obvious resistance level at the recent highs. Until there is a major break one way or the other, each individual stock chart remains the prominent evaluation factor.

Today’s selling, taking the S&P 500 back below the T-line and the Dow showing that it cannot get up through the T-line, indicates more slow downside drift, making the 50 day moving average the likely target over the next few days. The S&P 500 and the Dow are showing a downward trend channel while the NASDAQ continues to trade sideways. This still puts the market conditions to where specific sectors/stocks should be analyzed on their own merits. The overall market conditions are not demonstrating any powerful bullish or bearish forces. Individual stock trends are showing characteristics of slow upward direction but with a lot of trend channel indications.