September 29 Market Wrap-Up
The graphics of candlestick analysis allow for a much more clear analysis of the nature of investor sentiment. The sideways mode of the market indexes is clearly revealed when seeing both bullish candles and bearish candles occurring with the same frequency, making the market move absolutely sideways. This characteristic has been evident ever since mid July. Do not get discouraged if it appears to be difficult to make money in these market conditions. Fortunately, candlestick charts reveal which sectors are acting well, I.E. oil stocks. The ease in which candlestick signals and patterns allows for the correct assessment of market direction is the basis for establishing the correct positioning in a portfolio. Specific candlestick signals and patterns produce expected results. The lack of established signals and patterns also aid in accurately evaluating the lack of a trend/price move. This becomes just as important, allowing for the appropriate allocation of funds to the market and in cash positions.
Having the ability to assess individual commodities/futures and currencies also adds to being in the appropriate sectors and stocks. The breakout of crude oil prices through the resistance level makes having oil stocks a higher priority in the portfolio. This is what is called having all the stars in alignment. Being able to analyze the general trend of the market, analyzing which sectors are acting the best in the market and then analyzing the individual stock charts of that sector for the best trade set ups. Being in the correct trade at the correct time is all predicated on one simple factor, prices do not move based upon fundamentals. Prices move based upon the perception of fundamentals! Candlestick signals are the graphics depiction of what is occurring in investor sentiment.
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