The positive trading on Friday did not produce reversal signals, merely positive trading. This did not negate the possibility of more upside but the lack of a candlestick reversal signal in the indexes that further upside should be viewed as not a full-scale reversal but a potential bounce. Numerous short positions should have been closed on positive trading today but be ready to re-short if this market turns around. Any long positions should be applied with safety stops in place.

Another indecisive sideways market trend with the transportation index be in the only index showing conviction.NFLX appears to be the only biggie with a direction. Continue to scan for individual stock charts that are showing strong bullish or bearish signals.

What are the markets telling us about new strong sectors going into 2023? Nothing! However, the electric vehicle sector is showing negative bias. The lack of bullish enthusiasm in today’s market reveals investor sentiment is remaining the same as prior to the new year. The sideways mode of the market trend remains.

Although yesterday’s positive trading produced bullish reversal signals, MorningStar signals, in the indexes, the T line was not yet confirmed. Today’s lower trading, especially gapping down and trading below yesterday’s opens in the indexes reveal strong bullish indications. Any bullish trades require strong confirmation. Otherwise close them out and look for short positions.

Santa Claus rally? The Dow is showing the most resiliency gapping up after a spinning top off the 50 day moving average. The NASDAQ and S&P 500 are showing MorningStar signals but still below the T line. Short positions should be covered, long positions obviously working well today.

The Dow may be attempting support at the 50 day moving average. However the one consistency of the current market nature is that down trending stocks continue to move in a downtrend and bullish charts are maintaining strength. Established positions should still meet the criteria of staying above or below the T line.

The holiday weeks usually do not produce a lot of volatility or activity. This is the time of year to reflect on what you did right and what you did wrong and how to improve your investing going into the next year. Currently the biggies are trading lower continuing their downtrend. The pattern set ups are producing the best results i.e.SMMT J-hook.

The NASDAQ trading below the 50 day moving average, the S&P 500 did not support at the 50 day moving average today. Anticipate the Dow heading for the 50 day moving average. The downtrend persists, short positions are working much better than bullish positions.

Splitting hairs but still relevant when using the information built into candlestick signals. The lack of any true bullish signals over the past few days illustrated a lack of a major change of investor sentiment. Today’s bearish Doji sandwich especially in the S&P 500 reveals the Santa rally may not be in effect this year. Trading strategy remains the same. Long positions should have very compelling charts to stay long. Have short positions in the portfolio.

Today’s positive trading in the indexes, anticipating the Fed announcements, still is not showing any decisive trend. Currently, the only bullish indication is the indexes are trading above the T line. However, better trend analysis will be after the fed announcement. Play it safe, trade the strong patterns.