The uptrend remains in progress, the transportation index and the Dow trading higher, the S&P 500 trading flat, and today the NASDAQ is trading lower, the accumulative analysis indicates no change of investor sentiment in the overall market trend, merely rotation. Stay predominantly long, this is where simple candlestick scanning techniques allow for identifying which sectors are performing the best.

The market indexes remain in a steady uptrend. Why, you ask? It does not matter. The candlestick charts are revealing that all the buy and sell decisions are being made around the world are influenced by the assessment of investors anticipating more upside in the markets. We do not have to analyze why with candlestick charts all we need to do is analyze what everybody else is deciding to do. Continue to maintain a strong bias to the long side in the portfolio.

As can be logically expected, Today is a consolidation day after yesterday’s big bullish trading day. The Dow is showing the greatest weakness today while the other indexes, although trading lower, are not showing any dramatic selling. Unless there is a huge dramatic reversal, assume the overall market trend remains bullish with the indexes trading well within an uptrending trend channel. Stay predominantly long.

The bullish trading in the markets Today have additional relevancy. The Dow has gapped up through the downtrending resistance level of a wedge formation. The transportation index has gone up dramatically through the 200 day moving average. The NASDAQ and S&P 500 gapped up, continuing a J-hook type set up. This is all very bullish indicators, provided the indexes close at the high end of their trading range Today. The important factor is the Dow gapping up through a wedge breakout area. This could indicate a strong wave three, much more upside.

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.