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January 19th Market Wrap Up

The candlestick charts reveal there is no major direction in the market indexes. The Dow and S&P 500 traded lower, below the T-line. The NASDAQ trading slightly lower but closed on the T-line. The transportation index closed higher today. Logic says that this type of combination of indecisive trading indicates no major change of investor sentiment, merely shifting funds from one sector to the other. Without any major change of investor sentiment in the markets, the candlestick investor has the advantage of participating in the strong bullish sectors on the long side while at the same time shorting positions in the weak sectors. This is done with much more clarity utilizing the simple rules that are associated with candlestick signals and patterns. The candlestick investor has a great advantage to see what strength may be occurring in a price move when breaking out of a observable trading formation. This is clearly illustrated in chart patterns such as AMZN and CENX. Note that the breakout of a wedge formation was clearly demonstrated with a Doji followed by a gap up. That's strength revealed the existing resistance level was now breached and adding a very strong new dynamic to the price move. Having the ability to recognize a strong candlestick reversal signal at important technical or pattern breakout levels dramatically improves the probabilities of not only being in a positive trade, but a very strong positive trade.

 

 

 

Chat session tonight with Guest Speaker Jonathan Rose at 7pm central. Click here to register.


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