Morning Market Update for September 04, 2013

Although some bullish trading is coming in early in the day, the markets continue to demonstrate that there is no major selling pressure at these levels, yet. The Stochastics are showing oversold conditions and the candlestick signals are starting to show buy signals. Continue to hold both long and short positions in the portfolio. This is an area to start adding long positions but with the sense of nimbleness. A positive trading day today in the Dow and the S&P 500 would confirm the inverted hammer signal of Tuesday. This would be an extremely high probability indication the uptrend is starting again. The markets are not showing any excessive strength yet they are not showing any excessive selling. Although this is not a robust market condition, it will allow for specific candlestick signals/patterns to work effectively when there is no fear of a major selloff.