October 19 Market Wrap-Up
When the Dow gapped up yesterday in the overbought condition, it illustrated what the Japanese Rice traders graphically depict in their candlestick charts. Where do most people buy? They by exuberantly at the top. That is what a gap up in the overbought condition illustrates. We saw some profit-taking occurring in today's trading but at the end of the day the Dow climbed back up to where it was trading positive. The NASDAQ traded lower but showed buying by closing above where it opened. It closed right on the T line. More than likely, the direction of the market will be influenced by the budget vote this evening. That could continue the uptrend. However, the gap up in the Dow on Wednesday is still a warning flag to watch for a potential reversal/selling. It will be important on how they open the markets tomorrow.
There are still numerous J-hook patterns occurring in these market conditions. This provides opportunities to still make good profits on specific candlestick patterns in spite of the fact that the market is in overbought conditions. Utilize the patterns to add to the probabilities of being in the right direction at the right time.
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The Candlestick Forum Team
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