Archives for May 2020

The markets showed a potential reversal late this week. The Dow appears to be in the middle of a trend channel, with the implication there may be a few more days to the downside before hitting the bottom of the trend channel. The NASDAQ was even more bearish, forming a bearish best friend signal, a Doji followed by a gap down. Expect a few more days at least of consolidation. However, the prospects of a major reversal is not yet confirmed until there is evidence of breaching the lower side of the trend channel. Until there is definite confirmation the bottom of the trend channel is not going to hold, assume the slow upward channel is in progress. Have both long and short positions in the portfolio.

The gold and silver mining stocks continue to show good strength. As long as they continue to trade above the T-line, they can be maintained or added to the portfolio, GOLD, MAG, CCJ. The toy companies such as HAS and MAT showed very strong sell signals, bearish left-right combo’s and bearish McMuffin signals. They can be shorted on weakness this week. Regional airlines also showed some strong sell signals,SKYW, AAL, RYAAY. With the market indexes in the middle of a trend channel, likely to head lower to test the lower end of the trend channel, any long positions should have very compelling strength to maintain the trades. Adding a few short positions to the portfolio would be prudent.