Archives for July 2017

The markets are still in a mixed mode, the Dow trading positive and the NASDAQ trading negative. The T-line continues to act as a relevant factor. Numerous stocks and indexes that moved back up from lower opens on Friday to the T-line area are not getting confirmation Today. The trading environment remains the same, each individual stock chart needs to be analyzed on its own. Specific stocks and sectors continue to show strength or weakness in this market. There is no overall consensus of the market direction.

The T-line has illustrated that it is a very effective trend indicator. Any stock positions that traded below the T-line when the market started selling off clearly indicated the buyers had disappeared and probably would not come back into the trades until prices came back up above the T-line. The combination of a candlestick sell signal and a close/trading below the T-line gets you out of trades without the emotional questioning. Although the Dow is maintaining its trend, not selling off Today with any great strength, the other indexes are below the T-line. Expect a sideways motion in this market until Washington has better results coming from our illustrious representatives.

The markets are starting to show some warning flags. The transportation index is selling off excessively strong. The NASDAQ has Gapped Up in the overbought condition. AMZN has Gapped Up, FB has Gapped Up. Exuberance is starting to creep into the markets. Be careful, these are signs of potential reversals. Be ready to take profits on trades that might start showing sell signals in the overbought condition.

Today’s Gap Up positive trading in the Dow is forming a Bullish Flutter Kicker Signal. Although the markets are at all-time highs, if the Bullish Flutter Kicker Signal persists going into the end of the day, this will be a strong indication there is still more upside. The NASDAQ and S&P 500 continue to move in their slow steady uptrend, currently not showing any major change of investor sentiment.

Yesterday the Dow is down and the NASDAQ was up. Today the Dow is up and the NASDAQ is down. Clearly indicating there is no definite bullish consensus in the overall market, merely funds shifting from sector to sector. When the market remains indecisive/choppy, the combination of candlestick signals being confirmed by the T-line becomes a good probability trend indicator.

Summer doldrums or consolidation? It doesn’t matter, currently the markets are not showing any great strength one way or the other. This is probably a function of it be in the middle of the summer and there is nothing currently that is stimulating Bullish or Bearish sentiment. In these market conditions, holding existing positions require the simple trend analysis, our long positions remaining above the T-line and are short positions remaining below the T-line. Adding any new positions requires very compelling buy or sell signals. Anticipate some boredom.

The hanging man signal that formed in the NASDAQ and the S&P 500 Yesterday provided a little bit of a warning of potential profit-taking if the markets opened lower Today. There are no significant signals in. Those indexes that would indicate a major change of investor sentiment, the NASDAQ is still trading above the 3T-line. The Dow is currently trading below the T-line. If it closes at the lower end of today’s trading range, that would show a breach of the Frypan Bottom trajectory that had been remaining above the T-line. That pattern requires the Dow to close above the T-line Today to maintain the Frypan Bottom Analysis. A close below the T-line would imply more sideways movement on a short-term time frame.