The markets gap down back below the T-line this week and have not been able to get back up above that level. Although the market appears to be trading’s relatively sideways, the implication is that with the indexes trading below the T-line, the probabilities of more downside is great. A retest of the recent loans is the expectation of most of the talking head gurus on the financial news stations, but it would not be unusual to see some downside but a new buy signal before reaching the current low levels. This offset double bottom is not an unusual price pattern. Currently, there are rumblings of trying to get crude oil back up to make it economical for the oriole jewelers. This is making the chart patterns in oil related firms such as HAL, EOG, PDCE and EC good strong bullish prospects. The specialty medical supply companies continue to have good upside potential, APT, LAKE, and ADVL. The utility sector is producing some strong charts, EQT and ENIA.
There are numerous bearish J-hook patterns in progress, are recommendations to go short on KSS and SCVL remain viable with weakness continuing in the retail area. The markets remain finicky based upon announcements coming out on a daily basis on the status of the China virus. The light at the end of the tunnel may be the prospects of medications that work well at diminishing the virus symptoms. The markets are looking for good news to start a rebound, but until there is a dramatic bullish signal in the indexes, considered the downtrend in progress. These market conditions warrant having a portfolio biased toward the short side and/or cash. But as illustrated, there are bullish sectors in this down trending market. The T-line remains the predominant indicator. Remain predominately short until a bullish candlestick signal and a close above the T-line is witnessed in the indexes.
