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July 19th Market Wrap-Up

Was today a reversal in the markets or merely consolidation? Candlestick chart analysis answer's that question very easily. First, as long as the market indexes remain above the T line, the probabilities are greatly in favor of the uptrend continuing. Because the visual graphics of candlestick charts can instantly be analyzed, it takes a matter of seconds to analyze the Dow, the S&P 500, and the NASDAQ. Additionally, knowing that major market reversals occur when all the indexes are providing sell signals, analyzing that merely consolidation was occurring becomes much easier. Today, the transportation index traded positive, above the 50 day moving average, creating a bobble breakout. A bobble breakout produces an extremely high probability more upside will occur. Conclusion, if the transportation index has a high probability of moving higher, that indicates there is no major change of investor sentiment. The other indexes were merely consolidating. Candlestick analysis is merely simple logic put into a graphic depictions. You do not have to be a sophisticated technical analyst to take advantage of the vast amount of information put into a candlestick chart, producing quick and accurate price move assessments. The lack of any major change in the overall trend of the market allows for establishing high probability/high profit trades. Our recommendation to buy FIVE was based upon a frypan bottom breakout. Understanding what each candlestick signal and pattern illustrates as far as investor sentiment allows investors to constantly have investment funds put into situations that are going to produce inordinate profits.




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Good Investing,

The Candlestick Forum Team

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