November 13th Market Direction
Over the past few trading days, the market indexes have traded lower. However, the graphics of candlestick signals illustrate that every time the market opens lower, the Bulls immediately step in and closing above where it opens. This provides a much more truer indication of the nature of the Bulls and the Bears. The magnitude of the selling is more of an indication of profit-taking during an uptrend versus sellers wanted to come out of the markets. This type of market environment continues to make the analysis of each individual stock chart signal or pattern the important analytical factor. As long as there is no major change of investor sentiment in the general markets, individual pattern breakouts will continue to provide big profit potential.
The inverted hammer signal is one of the 12 major candlestick signals. It produces two major results! First, a positive open after an inverted hammer signal, especially in the oversold area, produces an extremely high probability of a profitable uptrend. Secondly, the uptrend will usually produce inordinately strong profits. Knowing what each candlestick signal and pattern illustrates as far as investor sentiment creates a huge advantage for knowing where to have trading funds allocated. This is based upon one very simple consistent indicator, human nature. This is the exact reason why we are looking at candlestick signals today. The Japanese Rice traders have produced centuries of profitable observations and applications of candlestick signals and patterns.
We will conduct a "Members Only" chat session tonight at 8:00 pm EST.
The Candlestick Forum Team
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