Archives for August 2017

The simple Doji rule! Yesterday the indexes formed an indecisive day, a Doji day, on observable potential support levels. Today’s positive trading confirms the support at those levels. The Doji rule – prices will move in the direction of how they open after a Doji. Knowing the simple rule allows for the quick decision-making for covering short positions and establishing long trades immediately. If the markets continue to trade higher Today, anticipate the support levels have shown they are acting as support. Now watch to see what the indexes do at the T-line area.

The indecisive trading of Today’s markets is occurring at potential support levels. The NASDAQ is currently trading in decisively at the reversal level of last week. The Dow is currently trading right on the 50 Day Moving Average with stochastics going into the oversold conditions. These will be important levels to watch for an indication of whether support at these levels indicate the markets are merely in a profit-taking pullback or a breach of the support levels indicating a bigger downside potential. The prognosis remains the same, have both long and short positions in the portfolio.

The markets are currently doing hammer/Doji type days with the Dow almost touching the 50 day moving average at its low. More significantly, the NASDAQ is doing a Doji/hammer signal right at the same level at bottomed out last week. This does not necessarily mean the downtrend is over but more an indication the markets may be back in a wedge/sideways mode. Continue to have both long and short positions in the portfolio.

Yesterday afternoon selling brought the indexes back down to where they were forming Doji’s. Today’s lower open, with a close below the T-line in the indexes makes the prospects of the sideways movement of the market more likely. This would not be unusual during the August vacation time frame. These market conditions still make having both long and short positions in the portfolio.

Today’s positive trading in the indexes are creating trend kicker signals. This produces a high probability outcome of more upside provided the markets close positive today. It is also producing J-hook patterns. This is consistent with the characteristic of this uptrend, steady up moves followed by profit-taking followed by steady uptrend. There are still numerous short positions that are working well in this market. Continue to have both long and short positions in the portfolio.

The markets are not showing any dynamic strength today but they are still trading above the T-line. The Dow has actually used the T-line as support today at its low end of trading. As long as the indexes remain above the T-line, the uptrend is in progress and probably what the same characteristics as the uptrend prior to the selloff late last week, a slow steady uptrend. The trading environment remains the same. Have both long and short positions in the portfolio.

Today’s positive trading is confirming the bullish Harami’s of Friday, which indicated the selling may have stopped. If the market indexes close of the top end of their trading range today, they will be confirming the bullish Harami’s and closing backup above the T-line, creating another J-hook pattern probability. Be ready to cover short positions if the market closes on a strong bullish finish today.