Archives for May 2017

The market indexes had the prospect of moving back into the flat trading range that occurred in most of the early part of May, producing a flat Frypan Bottom pattern with the hard selloff/recovery acting as the dimple. A lower close Today would make the prospects of flat trading a viable prognosis. Numerous stocks are starting to trade back below the T-line. If the market remains weak going into the close, reduced long positions. Maintaining or adding any long positions during a possible sideways market trend would require very strong buy signals.

The lack of strength/selling in the market indexes indicates there is no change of investor sentiment in the overall market trend. The only alert is the potential sideways mode of the Dow as seen prior to the big selloff two weeks ago. This would imply a Frypan Bottom type pattern with the sell off and recovery acting as the dimple. Currently, the lack of movement in the market continues to make the individual stock chart patterns the relevant analytical analysis. Staying long or short requires analyzing the specifics of each individual chart. Fortunately, there are still good profitable bullish charts as well as bearish charts. This is why we recommend Trend Analysis.

It is not unexpected to see some consolidation in the markets after a good strong bullish week, going into a long weekend. However, the consolidation does not illustrate any weakness or pullback, merely flat trading on the day. This does not deter any of the candlestick bullish charts from continuing their trends. The uptrend remains in progress, especially after Gapping up into new territory Yesterday through obvious resistance levels. Use the T-line as your ultimate trend indicator.

Today’s positive trading in the markets has great relevancy. It has gapped the indexes up through recent high/obvious resistance levels. As long as the market indexes stay above the breakout levels, the prospects of another wave to the upside is highly likely. The big selling day of last week is now viewed as a profit-taking day versus a breakdown of investor sentiment. These market conditions are allowing the strong candlestick charts to perform with excessive profitability.

Today’s market trading produces the same analysis as the past few days, the indexes remain above the T-line but without any dramatic buying and/or selling pressure. The uptrend in many Bullish stock prices is persistent but with backing and filling/profit-taking as the trends move higher. The T-line still remains a valuable trend indicator in slow upward waffling type moves. Stay predominantly long but having a few short positions in the portfolio is still going to produce profits. The indexes are approaching recent highs, making a breach of those levels a prospective J-hook Pattern Bullish confirmation.

Although there has been indecisive trading Today, the markets are not showing any selling pressure. The markets may not be showing any extravagant buying pressure but the fact that the indexes are still trading slightly positive and trading above the T-line continues to demonstrate the overall market is not moving one way or the other. These market conditions allow the candlestick signals and patterns to produce profits based upon investor sentiment in each individual stock/sector. Use each individual stock chart as the main criteria.

Today’s positive trading, as long as it stays positive going into the close, will bring all the indexes backup above the T-line. Although the indexes are still trading below the recent highs, they have recouped the dark candle created last Wednesday. A close above the T-line Today provides better insights into investment sentiment. The hard selloff of  Wednesday appears to be a profit-taking day versus a major reversal of the market trend. There is nothing yet in the candlestick charts to indicate the uptrend is continuing, but it does reveal that any selling is being offset by the strength of bullish sentiment. Even if this creates more sideways/slow uptrend in the overall market, it will allow for candlestick chart patterns to perform with good strength based upon the lack of any selling pressure in the market. This is why we recommend Trend Analysis.