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September 10th Market Direction

Although the indexes are not showing any bullish movement, the accumulative analysis is not showing any bearish movement. This was dramatically illustrated with the transportation index up over 200 points today while the other indexes did not move with any great resiliency. Knowing that the markets still have the lack of any bearish sentiment allows candlestick investors to move with much more conviction in establishing trades. These market conditions make the prospects of the strong candlestick buy patterns profitable at the same time candlestick bearish patterns are profitable short trades. Combining the analysis of the overall markets with the analysis of specific sectors leads to identifying stocks in those sectors that have the highest probabilities of producing profits. This is essentially putting all the stars in alignment.

Specific candlestick patterns, such as the bobble breakout, puts investor funds into high probability/high profit trade set ups. The bobble breakout is merely a more defined J-hook pattern but with much more investor following. If a bobble breakout is showing a J-hook pattern breaking out through the 50 day moving average, the identification of the pattern by candlestick investors puts them in a position where non-candlestick analysts are buying based upon a breakout of the 50 day moving average. Knowing what was setting up for the breakout allows the candlestick investor to get in immediately, well before everybody else starts piling in. Because candlestick signals and patterns are created by the reoccurring reactions of investor sentiment, the candlestick investor has a much more accurate analysis process for putting the probabilities are greatly in their favor.

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

Good Investing,

The Candlestick Forum Team

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