Trading Stock Information - Candlestick Signals Reveal Investor SentimentTrading stock information is revealed through Candlestick signals and/or Candlestick analysis. Being able to project the direction of the markets reveals huge amounts of trading stock information. Simple logic dictates that most stocks move in the flow of the market. Highly profitable trading stock information can be incorporated into a portfolio investment program when the direction of the markets can be correctly analyzed. Candlestick signals reveal investor sentiment pertaining to market trends just as well as projecting individual stock price trends.
Understanding the basics that create Candlestick signals produces a huge advantage to the Candlestick investor. When the conditions are right, with bullish signals forming in oversold conditions or bearish signals forming in overbought conditions, the direction of the markets can be better predicted. Market conditions, such as we have seen over the past couple of weeks, can also be evaluated using Candlestick analysis.
In many of the high profit patterns that can be visually analyzed, one of the major elements that provide trading stock information is the signals that reveal investor indecision. That indecision can be illustrated with a Doji at the top or the bottom. It can be represented by a series of Doji forming at the top or the bottom. Indecision can also be found in a series of numerous Candlestick signals, Doji, small Hammers, Inverted Hammers, Spinning Tops, or other indecisive trading days at a specific level of trading. However, indecision can also be analyzed without the presence of individual signals.
Market Direction - As you should recall, within the last couple of weeks the analysis of the movement of the Dow had been projected to have a very slow upward trend, eventually testing the 50 day and the 200 day moving averages. Two weeks ago, the Dow formed a Morning Star signal that indicated a bottom. A couple of days later, a Bearish Engulfing signal revealed that the buying pressure may not have been strong. From that point, the indecision of the market trend has been revealed by large trading days, both bullish and bearish, following right behind each other. Trading stock information has been hard to decipher in this market atmosphere.
What can be traded profitably out of this current market condition? Maybe nothing, but keep in mind that to profit from the markets, you have to be able to analyze what the market is telling you. At this time, the market is indicating that it does not know what it wants to do. If this is the case, do not expect to make large profits when these conditions are occurring. Important factors can be analyzed from what is going on in the current market conditions.
After witnessing a long series of indecisive Candlestick signals, what is expected next? What should have been learned through previous newsletters and on our chat room discussions, is that after a period of indecision, the trend will be revealed by the appearance of Candlestick signals that reveal what has been decided. Usually, the longer the indecisive period, the more powerful and lengthy the following trend. That becomes the next format for making big profits in this market. The Dow is moving sideways in a very indecisive manner. The NASDAQ has bounced off of the 50 day moving average back down to the 200 day moving average and is now showing a Bullish Harami. Notice how the NASDAQ could be setting up to trade in a very narrow trading range between the two moving averages. This would coincide with the indecisive trading occurring in the Dow.