May 22nd Daily Market Comments

Today’s positive trading, as long as it stays positive going into the close, will bring all the indexes backup above the T-line. Although the indexes are still trading below the recent highs, they have recouped the dark candle created last Wednesday. A close above the T-line Today provides better insights into investment sentiment. The hard selloff of ¬†Wednesday appears to be a profit-taking day versus a major reversal of the market trend. There is nothing yet in the candlestick charts to indicate the uptrend is continuing, but it does reveal that any selling is being offset by the strength of bullish sentiment. Even if this creates more sideways/slow uptrend in the overall market, it will allow for candlestick chart patterns to perform with good strength based upon the lack of any selling pressure in the market. This is why we recommend Trend Analysis.