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March 20th Market Direction

Because prices/trends moved in identifiable patterns, candlestick charts allow for a much more accurate evaluation of what is going to occur based upon the confirmation of a pattern or the lack of confirmation of a pattern. The Dow has been supporting at the T-line, creating a very slow curve pattern that can be identified as the potential of a J-hook pattern. As long as the market indexes remain above the T-line, the prospects of a J-hook pattern would indicate another major wave to the upside. A close below the T-line at this point would produce the assessment of a slow drifting downward trend, more than likely moving sideways/downwards until the 50 day moving average caught up. Because candlestick patterns are so easily identified based upon the visual characteristics, candlestick investors have a major advantage in knowing how to allocate long and short positions to the portfolio.

Price patterns have expected results. The J-hook pattern has very easy identifiable set ups with high probability expectations. Patterns have a major advantage for investors. They are more likely to continue their formations in spite of the general market not having any major decisive direction. There are simple entry points for a J-hook pattern as well as simple evaluations as to whether the J-hook pattern is continuing their trends. As illustrated in our recommendation of ATRA today, the prospects of a high probability trade result was based upon a very strong candlestick reversal signal, the left/right combo, right on the 200 day moving average and closing above the T-line on Friday. The entry strategy becomes very simple. Positive trading today would confirm both the left/right signal as well as performing the J-hook pattern as expected.

 

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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