40 years plus of investment background produces expectations after major announcements. The feds reported they were going to start raising interest rates. The knee-jerk reaction is that that is the right thing to do. But reality always indicates that when interest rates are rising, the stock market sells off. This provided the warning did not jump in excessively until there was confirmation of whether yesterday’s trading was a knee-jerk reaction or a full-fledged change of investor sentiment. As illustrated in today’s trading, the NASDAQ and the S&P 500 opened positive and then immediately started selling off. Although the Dow traded positive most of the day, the bearish sentiment became more evident when the bullish candle started turning bearish. The T line also remains a major factor. And obvious observation is witnessing numerous down trending stocks that showed a reversal bounce yesterday afternoon experienced resistance at the T-line today and started trading lower.The strength of the selling in the NASDAQ provides a good indication that the existing downtrend is continuing. Sectors such as the airline sector showed a bounce yesterday but individual stocks could not get up above the T-line, then started selling off again today. When the market goes into an indecisive whipsaw action, very short-term trading becomes the logical strategy.
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Good investing,
The Candlestick Forum Team
