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August 24th Market Wrap-Up

Candlestick charts provide a much more clear graphic depiction of what everybody else's watching. Currently there is a downtrending channel in the indexes. Today's lower trading, creating a dark candle, clearly indicated there was not going to be a breakout of the downtrending resistance level. This allows for common sense analysis of the overall market trend is still in a sideways/slow moving downward trend. Fortunately for candlestick investors, simple scanning techniques allow for the identification of the strong stocks/sectors even when the overall market is not showing any great directional strength. The better accuracy for analyzing what the overall market trend is doing makes for much better allocation percentage of funds in the portfolio. A sideways moving market makes the utilization of candlestick scanning techniques much more important.

As illustrated in our stock recommendations today, each one moving in the appropriate direction, a candlestick investor dramatically improves the probability of being in the correct trend movement of a stock price, whether long or short. Simple scanning techniques also indicate which sectors are being bought or sold. This is been illustrated in our recommendations of mining stocks that are moving well. The major benefit of candlestick analysis is that it utilizes investor sentiment that is the most influential indicator as to which direction a price trend will move. Each time a candlestick reversal signal is identified in the appropriate area of the trend an investor dramatically improves the probabilities of being in a profitable trade.

 

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Good Investing,

The Candlestick Forum Team


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