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October 4th Market Wrap-Up

The Doji that formed in the Dow on Wednesday produced the suspicion of a reversal in the overall markets. The Doji is a very revealing candlestick reversal signal. It's mere formation illustrates equilibrium and indecision between bullish forces and bearish forces. The Japanese Rice traders have provided two very valuable factors in identifying candlestick reversal signals. The visual identification of a trend reversal can graphically be identified with the 12 major candlestick signals. But more importantly, knowing what should occur with a high probability after a candlestick signal or pattern produces a much more valuable element for investors. The expectation of what occurs after a candlestick reversal signal puts an investor in the correct frame of mind versus not having the correct mental evaluation for establishing stock trade positions.

Knowing what each candlestick reversal signal illustrates allows for immediate profitability based upon simple confirmation. The market indexes showed strong selling based upon how they opened after the signals they formed yesterday. Knowing what forms a candlestick reversal signal allows for immediate profitability as demonstrated in the recommendation of MNK today. A bullish open would have confirmed a strong bullish trend. However, the gap down below yesterday's open produced the prospects of a very strong bearish kicker signal. Witnessing the gap down below the previous day's open allows the candlestick investor to execute trades that will produce immediate and big profits. This is based upon a very simple concept. Candlestick signals are the graphic depiction of what is occurring in human nature. Investor sentiment produces the same signals time after time.




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Good Investing,

The Candlestick Forum Team

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