October 31st Daily Market Comments

Although the indexes have been in a steady uptrend, the strength of investor sentiment is still tentative based upon the sensitivity to the latest news items or tweets. The Dow has yet been able to break out of the sideways wedge formation although the NASDAQ and the S&P 500 have just climbed up through the upper resistance level. Currently, the Dow has formed a strong bearish engulfing signal here the top of the trend channel. If it closes below the T-line, this will be a strong indication the wedge formation is still in progress. Unfortunately, this will make a lousy trading environment, a lack of continuity in either bullish or bearish trends. A close near the lower end of the trading range would warrant moving heavier into cash.