Archives for July 2017

After Yesterday’s Hammer/Doji type days in the indexes, bringing the indexes backup above the T-line, it was very important to see the markets open positive to confirm that the Bulls were still in control. The gap up in the indexes Today is showing very strong Bullish confirmation. The Dow is in the process of forming a slow curve/J-hook Pattern set up. The S&P 500’s Gapped Up through the downtrending resistance level. The NASDAQ is also Gapping up pushing through the Downtrending resistance level. The indexes obviously need to maintain their strength going into the end of the trading day to confirm these strong pattern implications. That would imply the consolidation of the past month is likely over.

Once again the markets are trading in the opposite direction of the previous trading day, making the overall direction a flat/sideways trajectory at best. The Dow is selling off the hardest. If it closes at these levels, a slow sideways slightly downward trend would continue until the 50 day moving average catches up. To continue a reasonable uptrend requires the indexes to close above the T-line Today. These market conditions still warrant analyzing each individual position based upon the price not showing a reversal signal and a close below the T-line. When the market is not providing any consistent trend, any open positions should reveal a good trend. Otherwise, sitting in cash for a few days does not hurt.

Although there is not any dramatic buying in the market today, the indexes reveal the confirmation of the bullish support demonstrated on Friday. The kicker type signal in the NASDAQ brought that index back up to the T-line. Today’s positive trading is currently forming a Doji above the T-line but resisting at the 50 Day Moving Average. The Dow continues to form a slow Frypan Bottom pattern using the T-line as a support level. The lack of selling pressure is illustrated by the biggies such as AMZN , NVDA, NFLX confirming the reversal signals that formed on Friday. This is another visual evidence that investor sentiment has not turn bearish. The lack of dramatic overall market direction still makes the analysis of each individual stock/sector the main priority.

Today’s positive trading currently indicates the lack of aggressive selling, continuing to make the sideways drift of the market the top prognosis. These market conditions still indicate having both long and short positions in the portfolio. Although the market does not want to go higher, it does not appear to want to go lower either. The T-line remains a crucial factor for analyzing which direction a trend is moving.

The magnitude of Today’s selling is negating any candlestick bullish signals or patterns in the indexes. Yesterday’s trading in the Dow formed a hanging man/Doji at the breakout area. Today’s Gap Down in the Dow is trading below Yesterday’s low of the Doji and currently trading below the T-line. A close in this area would put the markets back into a slow sideways drift at best. The NASDAQ formed a Bullish Harami Yesterday. It needed to open positive demonstrating the support level was continuing to act as support. Today’s gap down below Yesterday’s open reveals severe weakness in the NASDAQ. Unless the market indexes close near the high end of their trading ranges, especially backup above the T-line, the direction of the market will be dismally sideways at best.

Although the Dow is trading slightly lower today, it has revealed that it was using the T-line as support at the low of the day. The NASDAQ is trading higher Today, the S&P 500 is trading flat. This indicates there is no major change of investor sentiment, the slow uptrend in the markets continue. Sector rotation is in progress. Long positions and short positions should be based upon identifying and utilizing the strong candlestick charts. The remaining trading days of this week may be fairly low-volume due to the holiday week, the vacationing mode is still prevalent.