Anticipating the Stock MarketStock traders commonly make their living anticipating the stock market and individual stocks. Stock prices fell recently in the tech sector after Apple reported worse than expected earnings. The US Federal Reserve beige report came out comments on the state of the US economy that only served to make market sentiment more depressed. Indices were down across the board. Many engaged solely in long term investing are waiting for the market to establish a clear bottom in order to profit from buying at the bottom of the curve. Likewise traders look to profit from a market reversal but also profit by selling short or trading options on various stocks or exchange traded funds trading market indices such as the S&P 500 . Making a profit in trading stocks requires skill in anticipating the stock market with both fundamental and technical analysis . Anticipating the market and individual stocks requires perspective. While Apple and other tech stocks such as HP and Cisco fell in price recently, Intel went up on a better than expected quarterly report. Using technical analysis tools like Candlestick charts traders are able to tap into market sentiment for stocks and broad market sectors. Using Japanese Candlestick charts traders commonly profit by anticipating the stock market.
Successful stock traders succeed at picking stocks to trade and at trading stocks that they pick. When anticipating the stock market traders first decide which aspect, sector, or stock in the market that they wish to follow. For example, some stocks are less volatile than others in both good and bad markets. Consumer stocks, health care, utilities, and telecommunications are less like to fluctuate in price as greatly as other stocks when the broader market goes up or down. In fact, these stocks sometimes move contrary to the broader market during a downturn as traders and investors buy these so called defensive stocks. Also, these stocks can fall in price during an economic recovery as investors sell stock in these companies in order to add growth stocks to their stock portfolio. No matter which stock or type of stock one chooses to trade the use of clear and easy to read Candlestick patterns helps in anticipating and profiting from the market.
The market reacts to the stock market news. One day the news indicates that the European Union is going to solve its debt dilemma. The next day we read that German voters are angry about spending money to bail out other countries and the debt relief plans are not go going forward. The market acts like a yo-yo, cycling up and down on speculation. Fundamentals are unclear and confusing. Nevertheless the market comes to a consensus and anticipating the stock market is the business of technical analysis. Traders using clear and objective Candlestick pattern formations are able to track stock price patterns. Every day and every hour traders using Candlestick signals read market sentiment and identify price patterns that help predict the next move of the market in general, a market sector, or prices of individual stocks. Whether trading stocks, commodities, futures, or Forex. Candlestick signals help traders anticipate the market.
Market Direction: How do you participate in big price moves when they gap up on the open? The candlestick charts were indicating the uptrend was in progress. This would have established long positions prior to a potential big price move. Today's trading had for warnings of good strong moves based upon the premarket futures showing the T-line was going to remain as a support level and the 200 day moving average was not going to act as a resistance level. There were numerous price patterns that were bought over the past few days that allowed for big profits to be made today.
Candlestick signals and patterns work as efficiently on a daily chart as it does on the 1 min. chart. E-mini traders and YM traders should be prepared for some guest speakers over the next few weeks pertaining to daytrading the Dow and the S&P 500. The candlestick signals allow you to make my with a high degree of probability if you are swing trading on daily charts or daytrading on the 1 min. and 5 min. charts. Investor sentiment works the same way in all time periods.
Chat session tonight at 8 PM ET, Everyone is welcome! The Candlestick Forum Team