Yesterday’s reversal in the market trend illustrated the 34 EMA was acting as a resistance level. The Dow is currently the only index that is showing the T line as a support. The other indexes are now trading below the T line. The overall market trend is still in a downward channel. Watch the T line.

Note that the 34 EMA might be acting as a resistance level for the NASDAQ. The Dow and S&P 500 are currently showing indecisiveness after opening very positive. The indecisive nature of the indexes make the analysis of individual chart patterns the top criteria.

Today’s consolidation is not unexpected after the big price move in the markets on Friday. However, the assumption is that the uptrend is in progress as long as the indexes are now trading above the T line. Trading bias should be to the long side. There are still a few, very few, short positions still working.

Today’s positive trading obviously reveals the T line was not going to act as resistance, especially informative for the Dow and the S&P 500. The gap up and positive trading in the NASDAQ demonstrates strong bullish sentiment has returned in that index. This should have instigated covering any short positions that were not continuing to show weakness. The portfolio should now be biased toward bullish trades.

The market trend remains indecisive. The indexes today are trading indecisively positive but still below the T line. Below the T line still makes for high probabilities there is not yet a bullish uptrend. Be aware that as long as something is trading below the T line, the bearish sentiment will be more persuasive.

The market indexes continue to trade in a basing mode, not yet indicating if a bullish reversal has confirmed. The T line continues to be a relevant indicator. The J-hook patterns are producing good profit trades. The scoop pattern is also working. Until the markets show a definite trend, be prepared to close out positions quickly if they are not working.

A reminder, a downtrend will usually see early-morning buying but then continued selling later in the day. Do not jump after long positions in those conditions unless there is a very viable bullish signal or pattern. Continue to stay predominately short until there is a definite reversal signal in the market indexes.

A bounce? Not unexpected with the indexes moving excessively below the T line. Obviously anticipation of the Fed announcement today. After the fed announcement, watch to see what the market action is from there, being when the announcement is out-of-the-way, all the remaining factors for analyzing/deciding whether to be buying or selling will be back to the existing factors, inflation, five dollars a gallon gas, etc. Note that the Dow bounced back up to the 3T line and is currently selling off from that level. Keep in mind, the downtrend remains in progress until there is a candlestick buy signal.