The Dow and the transportation index are providing the most evidence of basing/reversing. The Dow showing strength at the 50 day moving average support level. The S&P 500 forming a Morning Star signal at the 50 day moving average. Now the final confirmation is required, closes above the T line. It will be important to see how the markets close today.

The lack of direction in the market indexes continue to make specific stock/sectors the top criteria. The market remains in a bearish trend as long as the indexes continue to trade below the T line. Although the Dow is trading positive, it is not demonstrating any bullish or bearish conviction, sideways. Analyze each chart on its own merits.

Downtrends usually consist of buying in the morning and selling in the afternoon. Be careful, as long as the indexes continue to trade below the T line, assume the downtrend remains in progress. Inflation is still a major concern.

Watch the T line! The market rally appears to be the result of inflation being what was expected, not what the White House put out yesterday as expectations. Numerous stocks have bounced up to the T line. Watch to see how the markets/stocks perform going into the end of the day.

Market analysis easy! As long as the indexes are trading below the T line, the downtrend remains in progress. Friday, the Dow traded above the T line most of the day but sold off to the T line area at the end of the day. That indicated there may not be a lot of bullish strength. Stay predominately short. Any long positions should have strong compelling reasons to go/stay long.

Although the Dow is trading slightly positive, the other major indexes are trading lower. This indicates no major change of the current downward bias. The trading strategy remains the same, stay predominately short but there are a few good bullish patterns working.

The markets remain in an indecisive mode, the transportation index is trading lower, not holding at the 200 day moving average. The major indexes continue to trade indecisively up one day down the next. Although the indexes are trading above the T line, they are not doing so with any great conviction. Continue to have both long and short positions in the portfolio.

The market indexes are mixed/indecisive. The NASDAQ and the S&P 500 are showing support at the T line, forming J-hook pattern set ups. The Dow continues to trade slightly lower, creating the prospects of a bearish Dagwood. Trade each individual stock chart on its own merits.

Be careful of an early morning bounce in a downtrend. The Dow is still below the T line, the transportation index is selling off hard. The strong sell signal in the Dow yesterday revealed a major change of investor sentiment. The portfolio bias should be to the short side.