June 12th Market Direction
Has there been a reversal of the overall market trend? The graphics of candlestick signals allows an investor to much more accurately assess whether there has been a change of investor sentiment of the current uptrend. Utilizing the simple T-line rule with candlestick signals allows investors to enter and exit trades at the appropriate time. The same analysis can be applied to analyzing the overall market trend. Friday's selling showed a very simple observation. The fundamentals of many stocks did not change one iota from Friday morning to Monday morning. What changed was investor sentiment. That was easily identified by the big reversal signals in the well followed stocks such as AMZN, AAPL, NFLX, NVDA. But there are other indications over the past two trading days that revealed a non-change of investor sentiment. Although the NASDAQ traded lower today, the graphics of candlestick charts revealed the NASDAQ was trading above where it opened. Logic says this is not an indication of sellers taking control. The Dow and S&P 500 both traded above the T-line, also indicating there was no mass selling. Finally, the transportation index trading up strong today. Simple logic says if there was a major change of investor sentiment, some indexes would not be trading lower while other indexes are trading higher. This simply reveals there is now a shift of sectors are being sold while other sectors are being bought. Identifying those sectors is very easy with candlestick graphics.
When is it time to take profits? The simple T-line rule states that you can start buying a position upon witnessing a candlestick buy signal and a close above the T-line. It is time to sell a position upon witnessing a candlestick sell signal and a close below the T-line. This is based upon hundreds of years of observations of what occurs in investor sentiment. Candlestick signals and the T-line dramatically improve the probabilities of being in positions at the appropriate time and closing out positions at the appropriate time.
We will conduct a "Members Only" chat session tonight at 8:00 p.m EST.
The Candlestick Forum Team
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