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January 7th Market Direction

Candlestick charts show what investor sentiment is actually doing, not what investors are projecting. A huge selloff day last week was blamed upon the negative ramifications of tariffs, political stalemate, and worldwide economic slowdown. Today's positive trading, continuing the bullish surge of Friday, has occurred under the shadow of tariffs, political stalemate, and worldwide economic slowdown. On any given trading day, there are always reasons for why people are buying or people are selling. But the important information conveyed in a candlestick chart reveals what is actually occurring in investor's decision-making. When the markets move up and down on a daily basis, there are simple underlying factors that allow the candlestick investor to evaluate what the overall market trend is doing. The top priority for analyzing a trend reversal is a candlestick signal or pattern. A trend continuation merely utilizes the T-line to indicate the trend direction. Today's positive trading adding confirmation the uptrend is in progress by the simple fact that the indexes are trading above the T-line.
 
Knowing the general direction of the markets allows candlestick investors to take advantage of individual stock price movement with much higher probabilities. Put the stars in alignment. If the overall market trend is in an uptrend, albeit indecisively but above the T-line, and individual signals and patterns can be identified an individual stock prices, the stock charts that are showing the strongest bullish signals dramatically improve the probabilities of being in profitable trades when there is no major reversal bias in the general market. An example would be stocks like NFLX and ROKU that had candlestick reversal signals which would to put investors in the right positions at the right time. Not all stocks are going up during this uptrend, but candlestick charts that indicated strong bullish signals and patterns are producing good profits, creating a trading platform that allows for a much greater probability of producing strong profits.

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

Good Investing,

The Candlestick Forum Team


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