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January 23rd Market Direction

The market indexes keep waffling above and below the T-line. Many people ask what is this indicating. The answer is simple, there is no definitive trend. This does not mean there isn't the capabilities to make good profits when the market indexes are merely waffling sideways. The visual aspects of candlestick analysis allow for scanning for the best stocks/sectors, both bullish and bearish during a sideways market. This is clearly illustrated when analyzing specific sectors, such as the gold sector. The gold ETF's showed clear scoop patterns. This provided a place to further analyze which stocks in the gold sector and/or mining sector would be acting the strongest. The same analysis could be illustrated in the retail sector. The weakness in that sector allows investors to have both long and short positions established in the portfolio that are going to produce profits even when there is no definitive direction of the market in general.

The T-line also becomes a very important factor when the market is not showing any resiliency. Numerous stock positions can remain established as long as the price does not show a candlestick sell signal and a close back below the T-line. Utilizing candlestick analysis has two major functions. First, the candlestick signals reveal when there has been a change of trend direction. Secondly, utilizing obvious support and resistance indicators, such as the T-line, makes analyzing when to continue to hold a position much easier.


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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