Ocotber 30th Market Direction
Candlestick analysis is not merely the interpretation of each individual signal, it is the common sense accumulative analysis of what is occurring in indicators that have a correlation to each other. The market trend is much more easily assessed when you analyze the Dow, S&P 500, the NASDAQ, and the transportation index altogether. Simple logic makes candlestick analysis easy for even those that do not have any technical trading background. Analyzing what each index is doing, with visual candlestick analysis, that takes less than a minute, allows the candlestick investor to have an accurate evaluation of what is occurring in the overall market trend. Logic says if one index is trading higher while another index is trading lower, the current trend has not changed, there is merely shifting from sector to sector.
Knowing that the overall market trend is still progressing in a particular direction, albeit very slow and/or steady, allows the candlestick investor to take advantage of high profit/high probability pattern breakouts. All boats will rise in a rising tide. Utilizing candlestick analysis allows investors to participate in the extremely fast rising boats during a rising tide. Candlestick signals and patterns illustrate where there is a large change of investor sentiment, making those price movements much more profitable. Simple scanning techniques provide valuable information as far as pinpointing which sectors are moving the strongest. Currently, oil stocks are moving very strong, making a slightly overweighted positioning of oil stocks in the portfolio viable. At the same time, the candlestick charts on retail stocks have shown strong bearish reversals, making short positions in the retail sector viable. Candlestick charts are the graphic depiction of what human nature does time after time when it comes to their investment dollars.
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The Candlestick Forum Team
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