Archives for August 2017

The initial bounce after a big selloff day is the recouping of the panic selling better occurs near the end of the day. Yesterday’s hard selling showed confirmation the Bears were in control with the indexes doing bearish trend kicker’s and closing below the T-line. Today’s positive trading, unless it does a severe bullish move back up toward the open of yesterday’s candles, should be viewed merely as a bounce. The downtrend should be anticipated as long as the indexes do not show strong reversal signals and a close backup above the T-line. Be careful of any long positions and be oriented toward the short side.

Today’s gap down open is creating bearish trend kicker signals. If the markets close near the lower end of their trading range today, a bearish trend kicker implies a strong force to the downside. Expect more downside. The areas to watch are the support levels such as the 50 day moving average for the NASDAQ and the S&P 500. The Dow has gapped down below the T line today. This all implies further downside. The short positions should be a stronger bias.

It is the summertime! The only trending index has been the Dow, which formed a long legged Doji yesterday, creating the prospects of some profit-taking. Today’s lower trading in the Dow is currently forming a Doji right on the T-line. This implies profit-taking versus a full-scale reversal of the markets. The NASDAQ and the S&P 500 had been trading relatively sideways for the past three weeks. Today’s lower trading provides the implication that the slow downward drift is still in progress, making a sideways move until the 50 day moving average catches up a likely scenario. Continue to have both long and short positions in the portfolio.

Although the markets have opened higher today, they appear to be starting to drift lower. This remains consistent with the lack of bullish sentiment in the NASDAQ and the S&P 500 over the past week or two of trading. Although the Dow has been hitting record highs, it is doing so with very indecisive trading days, Doji type days. These market conditions still make having both long and short positions in the portfolio the prudent strategy. Expect more sideways trading in the markets for the next few trading days. This is why we recommend Trend Analysis.

Yesterday’s Bullish Enthusiasm from AAPL helped stabilize the markets, the Dow anyways, but it somewhat masked the weakness that was being demonstrated in the NASDAQ and S&P 500.  Although the Dow is trading higher today, the NASDAQ and S&P 500 continue to demonstrate bearish candlestick signals. Currently there is no dramatic selling pressure, merely indication that the bullish sentiment has dramatically diminished. This market environment warrants having both long and short positions in the portfolio.

Observe the obvious! Without the strength of Apple Today, the Dow would be showing weakness. The NASDAQ and S&P 500, although opening higher, are now trading lower. The NASDAQ is in the process of forming its third bearish engulfing signal over the past five trading days. This illustrates the lack of any bullish sentiment, the sellers are starting to take control. Any long positions showing weakness should be closed. Short positions should be added to the portfolio. This is why we recommend Trend Analysis.

Although the Dow continues to trade higher, into record territory, the other indexes are not showing any great strength and a big percentage of stocks are currently trading lower or sideways. This demonstrates there is not an across-the-board strength in the overall market. Simple Candlestick Scanning Techniques are revealing many better short position charts than long positions.