Archives for December 2018

There does not appear to be any excessive activity in the markets today, anticipating that a large number of traders/investors are still in vacation mode. However, that was the same theory last week with the thousand point plus day in the Dow. If there is not any great chart setups, keep your powder dry. A very telling indicator will be revealed on Wednesday, the first trading of the new year, by witnessing which sectors are coming out of the chute with the greatest strength. This is the accumulative analysis of the big-money funds positioning themselves in sectors they believe will do well in the first part of 2019. When asked what the markets are likely to do in 2019, there is only one viable answer! Who knows! The best thing an investor can do is utilize the information built into candlestick signals to profit from what the markets are telling us. Do not base your investment strategy on what talking heads are predicting. They have no idea what the markets will do. Use the vacation time to analyze what you did wrong and what you did right in your trading this past year. Using the candlestick charts correctly will make for a profitable new year no matter what the market does.

Today should be a very lethargic trading day. However, that is what was expected all week and it is evident that that has not happened. The indexes continue to hover right at the T-line area. Without any dramatic evidence of bullish or bearish control in the overall market, each individual stock/sector is the predominant analytical factors. Unless there is very compelling buy or sell signals, sitting on the sidelines until the markets show a definite trend is not a bad strategy. 

The holiday week and the chopped up trading week will more than likely see very low volume. This would make a major reversal in the market very unlikely. As illustrated in Today’s trading, the initial bullish trading quickly disappeared, bringing the market indexes back down to a relatively flat trading range. Numerous stocks are trading positive Today after an extended downtrend but they are currently trading well off their highs. The low-volume trading still requires a candlestick reversal signal that is very compelling to want to change from a short bias in the portfolio to a long position. Stay predominantly short. Gold stocks continue to act well on the bullish side.

The holiday week and the chopped up trading week will more than likely see very low volume. This would make a major reversal in the market very unlikely. As illustrated in Today’s trading, the initial bullish trading quickly disappeared, bringing the market indexes back down to a relatively flat trading range. Numerous stocks are trading positive Today after an extended downtrend but they are currently trading well off their highs. The low-volume trading still requires a candlestick reversal signal that is very compelling to want to change from a short bias in the portfolio to a long position. Stay predominantly short. Gold stocks continue to act well on the bullish side.

Although the markets tried to trade positive after opening lower Today, the downtrend still remains the predominant factor. The prognosis remains the same, until there is a dramatic reversal signal in the markets and a close backup above the T-line, the downtrend remains in progress. Oversold conditions may experience a bounce back up to the T-line, but as of yet there are no signs that investor sentiment has changed. Stay predominantly short with logical stop loss placement’s.

The market indexes formed Doji/Harami’s yesterday, producing the prospects of a reversal of the downtrend. Today’s positive trading currently reflects the potential confirmation of a reversal. However, the confirmation requires a bullish close today, making the T-line the next potential target. This implies a bounce to that level, then a breach of the T-line is required to show that a full reversal of the downtrend has been established. Any buying Today requires the markets to close positive. A close back near the lower end of Today’s trading range would indicate the Bulls are not yet taking control.

After a 1000 point drop in the Dow over the past two days, Today’s positive bounce is not unexpected. Numerous stocks have obviously gapped up Today but this makes analyzing prices easy. If prices start coming back down through the open price, it indicates the lack of bullish follow-through. The market has been in a strong selling mode. Until there is a dramatic reversal, a strong candlestick bullish signal in the indexes, anticipate the downtrend remaining in progress. This may not necessarily mean big selling days as experienced over the past two days, but some drifting lower until bullish signals start to appear. Stay predominantly short until there are definite signs of the Bulls are taking control.

Although the markets are trading lower, the indexes are currently trading up near the top end of their trading range, creating hammer/Doji formation so far today. However, the overall trend of the market needs to take into account that Friday’s hard selling brought the indexes down through the bottom/support area of the sideways channel. Investor sentiment has not yet shown any strong bullish reversal. Additionally the T-line continues to act as a down trending indicator.

The market indexes continue to toy with the lower channel support level. Today’s gap down in the Dow after a Doji yesterday showing failure at the T-line reveals more bearish pressure, the possibility of a bearish J-hook pattern that would take the Dow down through the support level. Until there is a definite change of the sideways trend channel in the indexes, any existing positions, either long or short, can be maintained as long as they are not breaching their T-line trends. But this is probably not a market condition to be adding new long positions or short positions yet. Be patient, the market will provide trend information soon. Offsetting the Dow’s Doji gap down will require strength with Today’s trading closing near the top end of the trading range.

Although the markets have been trading positive Today, numerous stock charts have not been showing any great strength, actually trading lower. The indexes are still demonstrating the downtrending T-line continues to act as a viable factor. The prognosis remains the same, any existing positions should have good compelling bullish or bearish chart patterns. This market still does not have overwhelming bullish or bearish sentiment, sideways.