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December 10th Market Direction

Hammer signals, in the Dow, S&P 500, and the NASDAQ. Providing the visual implication that the lower support level of the sideways channels is holding. A hammer signal, one of the 12 major candlestick signals, is a strong indication there has been a change of investor sentiment. However, a candlestick reversal signal needs confirmation. This makes the analysis of what the trend is doing very simple. A positive open tomorrow would indicate the hammer signal was the reversal. Also, note where the hammer signal occurred in the Dow and S&P 500. Right on the support level of the sideways trend channel that has developed over the past two months. The visual aspects of candlestick signals allow an investor to see immediately what investor sentiment is doing at observable technical levels/support or resistance levels. A positive open in tomorrow's trading would make the trend analysis more clear. The sideways trend channel is still in progress.

Trying to trade during market conditions as demonstrated over the past few days is difficult. A down day, an up day, a down day, etc. Fortunately, the graphics of candlestick signals and patterns reveal high probability results from what investor sentiment does time after time. When the market indexes are difficult to follow, buying high probability candlestick patterns greatly diminishes the effects the overall markets have on individual stock prices. The bobble breakout, a much more defined J-hook pattern, provides much greater probabilities of producing profits in a trade in spite of what the overall market trend is doing.

 

We will conduct a "Members Only" chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team


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