The selling brought the indexes back down below the T-line. The T-line rule makes the probabilities of trading lower in the near term highly probable. Although the Dow supported off the 50 day moving average on Friday, the NASDAQ and the S&P 500 traded lower, forming potential bearish J-hook patterns. Unless the indexes show strength from these levels, the markets could be trading lower. This is where you want to have both long and short positions in the portfolio. Fry pan bottom patterns have been producing strong profits during this sideways movement of the market for the past two weeks. Strength is being shown in the diagnostic substance sector, QDEL, INO, FLGT, KIN, CRDF. The medical instrument sector is also showing good strength, VVPR, FLDM, KODK, OSUR, REKR. Short positions can be established in the restaurant sector, DIN, ARMK, BLMN. Long positions can be maintained as long as they continue to trade above the T-line and any weakness in the markets should instigate more short positions established.
