Archives for March 2019

Today’s positive trading in the market indexes makes the wedge formation/sideways mode of the overall market trend much more prominent. The transportation index continues it’s uptrend, adding evidence that there is no major change or bearish sentiment yet coming into this market. The predominant analytical factor is the sideways wedge movement of the markets. This still makes the analysis of each individual stock chart the top criteria.

Although the market indexes are trading positive Today, there still is not any great signal indicating whether the Bulls or the Bears are in control, producing a sideways trend. The lack of decisiveness, evidenced by the indexes waffling at the T-line, continues to make having both long and short positions in the portfolio the prudent strategy. Set your stop’s at levels that should not be tested if a current trend is going to continue.

The market trend was clarified by how the markets opened after yesterday’s Doji. All the major indexes not only opened positive Today, but they gapped up. If the markets continue to stay strong going into the close today, it can be assumed that the uptrending channel of the markets are back in progress, the major indexes after gapping up will be closing above the T-line. Any short positions should still have compelling reason to stay short with the prospects of an uptrending market getting that much better Today.

The indexes close below the T-line on Friday, indicating the probabilities of some more selloff on Monday. However, the lack of a reversal signal implied that any further selloff would be merely profit-taking versus a full-scale reversal. The implication of profit-taking was also evident with numerous stocks still trading green/positive today. This would indicate the markets are merely in a short-term pullback. Keep utilizing each individual stock chart as your primary analytical factor.

A question often asked, how do you analyze a trend when it keeps bobbing up and down above and below the T-line? Simple, what does that illustrate about the Bulls and the Bears? There is no decisive trend direction. Yesterday’s bullish trading produced the prospects the indexes were going to remain above the T-line. Today’s selling obviously did not confirm. This creates a market environment where each chart pattern requires good bullish confirmation to stay long and having short positions in the portfolio is prudent. If the indexes close near the low end of their trading range Today, be prepared for more sideways/indecisive market trends, until there is something relevant that creates a strong bullish and/or bearish sentiment.

Today’s positive trading continues to confirm the uptrending T–line is still acting as support, as illustrated in the NASDAQ and the S&P 500. The positive trading in the Dow in the T-line area illustrates the lack of any major selling pressure as of now. The assumption remains the uptrend remains in progress as long as the indexes stay above the T-line. This is producing big profits for candlestick signals/pattern breakouts, i.e.ALGN, WIX, NFLX and MU trend kicker signal. Stay predominantly long until there is evidence of strong sell signals in the indexes.

Yesterday’s little gap up in the market indexes, followed by selling later in the day, implied there would probably be some profit-taking. Today’s lower trading is currently trading well off their low in the indexes. As long as there is not any major selling candle today, assume that today is merely a profit-taking day. Continue to utilize the T-line as your final criteria for recognizing a change of investor sentiment.

Today’s bullish trading continues the steady uptrending market. The lack of evidence of exuberance is illustrated with numerous stocks trading in an upward direction but with one or two days to the upside, followed by a day of selling, followed by more upside. This indicates there is profit-taking occurring along the way. Because the market is not providing a powerful directional force, this makes each individual stock chart analysis based upon the candlestick signals or patterns. Obviously have the portfolio biased to the upside but there are still a few good short positions performing profitably. It is good to have a slight mixture of short positions in the portfolio as a safety factor.

The indexes needed to see strength Today to indicate the recent tops were not going to continue to act as a resistance. The Dow is currently trading above the T-line, the NASDAQ and S&P 500 are trading into new recent high territory. The uptrend is in progress as long as the markets do not close back below the low end of their trading range today. Continue to stay long.

The indecisive nature of today’s trading in the market indexes is illustrated by numerous stocks trading slightly positive and numerous stocks trading slightly negative, not demonstrating an overall consensus.NVDA trading lower, AMZN trading higher. It is important to observe the uptrend in the NASDAQ and the S&P 500 is currently showing indecisive trading at the same levels those trends topped out a few weeks ago. Watch what signals might occur at those potential resistance levels. The prognosis remains the same, the important analytical factors are based upon each individual stock chart.