Although the Dow is trading higher, there is not signs of bullish sentiment in the other indexes. The downtrend persists, short positions are producing the best profits.

The slow summer doldrums downward drift remains in progress. Today’s positive trading still does not bring the indexes convincingly above the T line. Stay predominantly short but long positions are working well also.

The T line remains the relevant indicator. The NASDAQ still in a solid downtrend, as well as the S&P 500. The Dow is having a hard time getting up above the T line. The strategy remains the same, holding long positions require stay in above the T line but the bigger profits are likely to be in the short positions.

Be careful of the bounce! Note that the NASDAQ and the S&P 500 are having a hard time getting up through the T line. The Dow is not showing any great decisiveness, continuing it sideways motion. Use the T line as your final criteria.

Whenever indexes are trading at or below the T line, they are much more susceptible to selling off, enhancing bearish sentiment, when bad news is announced. The taxation on the European banking system is the bearish stimulus. The short positions have better prospect.

Today’s positive trading is offsetting some of the selling of Friday, keeping the indexes in a sideways trading mode. This may be the summer doldrums. Keep both long and short positions in the portfolio.

Watch the T line! Although the indexes are trading positive after the job report, they continue to have a hard time getting up through the T line.

The downgrade of the US bonds closed the indexes back below the T line. Assume bearish sentiment is now in control. Be ready to closeout long positions that are not showing stability. Be ready to add to the short positions. No pics today’s so far until the markets reveal what they are intending to do.

No major direction in the indexes, the overbought condition is allowing for some profit-taking in this area.

No great buying pressure but no selling pressure, assume the uptrend remains in progress as long as the indexes continue to trade above the T line. Same strategy, stay predominantly long but keep safety stops in place