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October 20 Market Wrap-Up

Although the indexes are trading lower today, they are trading above their open levels. This indicates the selling pressure in the markets are not that dramatic. On the other hand, the buying pressures are not that dramatic, keeping the nature of the market consistent with its trading patterns of the past three months. Not only is the general direction the market flat/indecisive but each trading day demonstrates indecisiveness. This obviously makes finding strong/consistent price moves difficult to find. Simple candlestick scans provide good trading opportunities even/especially in market trends that are not showing any resiliency one way or the other.

Because candlestick analysis utilizes the visual facets of human nature, candlestick investors can utilize the information provided in simple signal analysis. When the markets in general are moving in a sideways mode, the simple scanning techniques allow for finding the best bullish trades and the best bearish trades. Candlestick patterns are extremely reliable. They graphically illustrate the build up of investor sentiment. This information is very relevant for each individual trading position when the general market is not providing a trending bias. As illustrated in our CRK recommendation, a frypan bottom has provided good steady bullish profits even when the market is not showing any favor to the Bulls or the Bears. At the same time, having bearish positions in the portfolio is also profitable in these market conditions. AMZN as a good example of utilizing the information conveyed in candlestick signals and then applying the common technical tools that most investors utilize to make their investment decisions.

Public Stock Chat session tonight at 7 PM central with Guest Speaker Chris Verhaegh. Click here to register.

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