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October 24 Market Direction

The sideways mode of the market has been obvious going, on for three months now. Fortunately, candlestick analysis allows investors to identify when there is a high probability of a change of investor sentiment. This can be seen today in the NASDAQ. A gap up positive open today, well above the T-line, has created the prospects for a scoop pattern. The scoop pattern has high probability expected results, a strong bullish trend acting like a slingshot effect to the upside. While the Dow and S&P 500 traded positive today, looking at each one on an individual basis would still imply major indecision in the overall trend of the market. The simple analysis is that the market indexes are backup above the T-line. Although there is not confirmation that the next bullish trend might be starting, the indication of at least a sideways mode in the markets still being in progress provides the information required for maintaining high profit positions. Candlestick charts that are showing strong signals or patterns in spite of the market not moving at least reveals there is no strong selling pressure in this market. This makes the evaluation of the individual stock charts better analyzed based upon the lack of any severe selling occurring in the overall market, slowing down any bullish chart progress.

Without any severe selling pressure in the markets, patterns and confirmed trends can remain in progress as long as the uptrend confirms by staying above the T-line. Strong reversal patterns such as seen in the Amazon chart makes purchasing the stock and/or the options with a much higher degree of probability of making money. Having the ability to analyze the pattern that has been created in a trend allows for much better and more accurate entry-level purchases and the appropriate option trades. This is evident in the recommendation for buying weekly calls based upon the slow curve/frypan bottom pattern that was created in the NVDA chart. Once an investor becomes acquainted with a high probability signals and patterns of candlestick's, participating in profitable trades improves dramatically.


We will conduct a "Members Only" chat session tonight at 8:00 p.m EST.

Good Investing,

The Candlestick Forum Team

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