Archives for November 2018

Although the Dow is trading slightly lower, the NASDAQ and S&P 500 are trading just slightly positive. This would indicate merely shifting of funds from sector to sector. The transportation index is showing good strength today, also an indication that there is no dramatic selling pressure in the markets.

The expected profit-taking after yesterday’s big huge move to the upside is in progress. As long as the market indexes do not give back a majority of yesterday’s gains, anticipate this as early morning profit-taking. Watch to see if the indexes come back up toward the top end of the trading range by the end of the day. This would imply the profit-taking is over. As long as the indexes currently stay above the T-line, assume the uptrend remains in progress. Expects to be sitting and watching Today. Aggressive traders can buy pullbacks that appear to be supporting at T-line’s.

Today’s positive trading in the markets have brought all the indexes backup above the T-line after an indecisive basing period over the past five or six days of trading. However, volume remains relatively low on numerous stocks. The J-hook pattern appears to be a predominant price pattern that is working well in these market conditions. Any open positions require very convincing candlestick signals/patterns until the market provides strong confirmation of direction. This would require confirmed trading above the T-line in the market indexes.

The Dow is not holding at the 200 day moving average, a viable support level. The other indexes are trading lower but currently well up above their lows of the day. Obviously there is nothing showing any major change of investor sentiment. With the indexes trading below the T line, continue to stay predominantly short until there is some evidence of a candlestick reversal signal. As of now, the sellers remain in control. The weed stocks are showing strength today

Although the indexes are trading positive today, they are currently trading below where they opened. This indicates the lack of any dramatic bullish sentiment, merely a bounce. However, the transportation index is maintaining strength today after the inverted hammer/Harami at the T-line yesterday. Today’s positive trading is bringing that index backup above the T-line. The prognosis remains the same, assume the downtrend in the markets remains in progress until there is a candlestick reversal signal and a close backup above the T-line.

The positive trading today is potentially creating a bullish Harami’s in some of the indexes, but it will be important to see how things close at the end of the day. Bullish Harami’s at the end of the day would give an indication that the overall market trend may be moving into a sideways/wedge formation is not making any dramatic market move one way or the other. This type of market condition still warrants having both long and short positions in the portfolio.

Friday’s trading made today’s analysis of the market direction relatively simple. After last week’s gap up in the Dow followed by a Doji/Harami, followed by lower trading on Friday but the indexes closed at or slightly above the T-line indicated what was required for Today’s open.

Yesterday’s Doji in the overbought conditions of the market indexes implied that a lower open Today would indicate profit-taking has started. It appears as if the 3T-line has acted as the pullback support for the Dow and S&P 500, the NASDAQ is use the T-line as a support. If the indexes use those levels as support, it can be assumed that today is merely a profit-taking day versus any major change of investor sentiment in the overall market trend. Stay predominantly long as long as the indexes do not always sudden fall out of bed. Obviously, any long positions recommended today should not be executed until they demonstrate bullish confirmation.

The elections apparently did not surprise anybody, the bullish direction of the markets continue. Keep watch! The Dow is currently trading at the 50 day moving average and the NASDAQ is trading up to the 200 day moving average. These levels need to be watched carefully as potential resistance levels. However, the S&P 500 has gapped through the 200 day moving average making the 50 day moving average a likely target. Obviously the bullish sentiment has come back into the markets. The doubt of the midterm elections are now out-of-the-way. Stay long until the appearance of reversal signals.

Obviously, Today’s trading is going to be very lethargic until the midterm elections are over. However, the Dow trading up 60 points and the NASDAQ doing a little J-hook pattern off the T-line demonstrate that bullish sentiment is still pervasive in this current market trend. Don’t expect any major movement today but the premarket futures will be very informative tomorrow morning. Be ready to move one way or the other.