Beware the bounce! Note how the indexes were starting to move a good distance away from the T line. This created the potential of investor sentiment producing a bounce back up toward the T line. However, that did not necessarily mean a reversal of the market trend. Positive trading would merely allow the T line to close the gap between itself and the market price. Before covering any short positions, allow the trading to show what it is likely to do going into the end of the day.

The market indexes are likely to have indecisive trading and/or a bounce based upon the distance they are trading away from the T line. That factor provides a much more reliable analysis of the market trend, the further away you move from the T line, the higher the probability of will come back and test. This produces an alert to be more diligent for watching when to cover short positions on a short-term basis.

Candlestick charts make trend is obvious. Sell signals and continued trading below the T line makes it very visually clear as to what investor sentiment is doing. The market downtrend makes individual stock analysis easier to evaluate. Numerous short positions looked a little bit testy yesterday but for one major factor, the T line! Although there had been some bullish trading in a number of short stock positions, they had not closed above the T line yet. Well most investors are anxiously waiting for their bullish positions to turn around, candlestick investors are enjoying good profitability.

Although the overall market trend is down, it is doing so with a very choppy/oscillating manner. Today’s Fed announcement will make the market direction more evident. Any new positions added today require very compelling signals or pattern confirmation, either bullish or bearish, otherwise it will be more prudent to wait to see what the market reaction is after the fed announcement.

What does the T-line imply? If prices are trading below the T-line, bearish sentiment is still the underlying factor. It is very important to acknowledge this definition. Although the market indexes showed bullish signals yesterday, the main analysis remains the probability of the trend.

Bullish reversal? Be careful of the bullish activity early in the day followed by bearish trading later in the day. Obviously it will be important to see where the market indexes close. The assumption is the downtrend remains in progress with the indexes trading below the T line, and the 3T line. The lithium battery companies maintaining their uptrend.

Nothing to really analyze, the bearish J-hook pattern in the market indexes produced a high probability that the downtrend was still in progress. I was mentioning in the chat room this morning that before candlestick analysis came along, I would have been watching my positions with great anxiety wondering when they would finally turn around and head back up. Now, the downtrend is very enjoyable allowing short positions to continue producing profits. Once you know how to analyze candlestick charts correctly, anxiety becomes an alert. If you wake up in the morning anxious about your trades and portfolio, that is a good indication you are not doing what the candlestick charts are revealing.

Did you know what the market was going to do today based upon the inflation numbers announcement? Of course not! But the important aspect of investing is knowing what to do based upon what they specific stock charts are revealing. This allows for the correct decisions. Note numerous uptrending charts opened lower but are currently trading above where they opened. And also note that some stock prices opened lower and continue to trade lower. This would have indicated which positions to close out immediately and which positions to hold and watch to see what the daily reaction will be.