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March 13th Market Direction

The use of candlestick analysis provides an investor with much more command over their investment perspectives. Because the candlestick signals are created by human nature that has been observed for hundreds of years, they produce extremely high probability results. The nature of each signal allows an investor to have a much more clear analysis of what is occurring in investor sentiment. The signals show when a change of investor sentiment is about to occur. It also demonstrates when there is not any major change of investor sentiment. This becomes extremely important when analyzing what a market index or a stock price trend is demonstrating. A good example is analyzing the current market trend. The Dow has shown some profit-taking over the past two weeks, but the fact that each day is a Doji type day illustrates there is no powerful selling pressure. The NASDAQ,after a few Doji type days continues to trade above the T-line, illustrating no selling pressure at all, the possibility of a J-hook pattern indicating another strong price move to the upside. Having the ability to analyze the direction of the markets allows investors to have a much more dominant control of how they position their portfolio.

When the markets are not showing any decisive direction, simple candlestick scanning techniques pinpoint which sectors are acting the strongest, even though there is no strong direction of the overall market. Currently, the ETF's in the biotech sector make it much more clear that the strong charts in that sector are going to continue to produce positive results. The analysis of crude oil allows for the assessment that the oil stocks sector is not going to have any bullish prospects, more likely some continued selling. Because candlestick charts are the accumulative knowledge of everybody buying and selling specific trading entities, it creates a trading platform with all the stars in alignment. Accurate assessment of the overall market direction, scanning to pinpoint which sectors are acting the strongest, and analyzing which stocks are acting the strongest in that sector. This methodology constantly puts the candlestick investor in the right positions at the right time.

 

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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