September 1 Market Wrap-Up
The market trend analysis becomes much more accurate when incorporating the information built into each individual candlestick signal. As illustrated in today's trading, the Dow formed a hammer signal/Doji after bouncing up off the 50 day moving average. The indecisive trading of today is consistent with the indecisive trading in the market indexes over the past six weeks, the summer doldrums. Candlestick analysis utilizes the information in each daily signal to illustrate the nature of a trend. The sideways mode of the market indexes over the past six weeks clearly indicated the lack of bullish or bearish pressure. Having the ability to analyze what the overall market trend is doing allows the candlestick investor to apply the correct trading program to the portfolio.
The sideways mode of the market makes for a much better perspective on which sectors/stocks should be invested. Although the magnitude of bullish or bearish charts are greatly diminished in a flat market, easy candlestick scanning techniques clearly demonstrate which sectors are acting the strongest or the weakest. Additionally, candlestick patterns will perform with much more proficiency when there is a any concern of any drastic change of the market direction. This makes high probability pattern breakout's very profitable. The frypan bottom pattern as well as the J-hook pattern not only produce high probability results, but also high profit results. This allows for excessive profitability even when the overall market is not moving.
Public Stock Chat session tonight at 7 PM central with Michael Thomsett. Click here to register.
The Candlestick Forum Team