Here's a chart of the XJO as a broad market indicator. The trend of the overall market influences and moderates the price movements of individual stocks.
The first chart shows the XJO with up and down arrows, generated automatically from an ADX trading system. Downtrends of an overall market often mute or slow individual stock price uptrends or recovery, dampening sentiment.
The second subgraph shows the XJO within the confines of a cloud-band. As you can see, an uptrend is seen when prices breakout of the lower cloud-band and then moves up to the upper cloud-band. The candlestick then turns blue. As long as it is in uptrend, it stays above or within the upper cloud-band. Once the price falters and falls out of the upper cloud-band, ( at the same time with the candlesticks turning red in colour ) we know that a correction is in progress.
Yesterday, the candlestick has outbreak of the upper cloud band to the downside and has also turned red.
Let's be aware of the moderating influence of the overall market on individual stocks as we trade.
