October 4th Daily Market Comments

The Doji that formed in the Dow yesterday created the suspicion that profit-taking/consolidation was likely to occur Today. Currently the Dow has pulled back to the T-line, not yet confirming any major reversal in the markets. Also, the NASDAQ has sold off hard, creating the potential of a bearish best friend signal if the 50 day moving average does not hold in the NASDAQ. The T-line remains a critical indicator. Long positions that are trading below the T-line Today should be closed out. They can always be bought back if the market moves prices back up. Obviously, the short positions are working well Today.