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February 25th Market Direction

The current bullish uptrend, illustrated by the candlestick signals trading above the T line, is investor sentiment anticipating a successful trade deal with China. It doesn't matter why the uptrend is in progress but if the China trade deal is the anticipated stimulus, profit-taking has to be expected if/when a successful trade deal is signed. By the rumor, sell the news. This may or may not mean the uptrend does eventually continue but the candlestick charts will reveal when profit-taking might occur. Having the visual ability to recognize whether the Bulls or the Bears are in control allows the candlestick investor to have a much more accurate and profitable trades strategy. Currently, the uptrend is showing good strength because the indexes have broken through obvious resistance levels, i.e. the 200 day moving average. Today's trading closed near the lower end of the trading range, producing a shooting star/Doji type day in the indexes. This provides the visual analysis of possible profit-taking based upon lower trading on the open tomorrow. Today's gap up, with the indexes in the overbought condition, is usually an alert to start watching for some profit-taking. This does not necessarily indicate a reversal in the overall market trend, merely some profit-taking in specific stocks/sectors.

The strong sectors can be identified with obvious candlestick breakout charts. LABU gapped up today, breaking out of a trading range, indicating the biotech stocks are getting new strength. These type of evaluations on allow the candlestick investor to pinpoint the sectors that are going to produce the best profitable results. Because human nature works the same way time after time, the identification of a bullish candlestick signal can add the probabilities of a high profit pattern breakout. AAPL formed a Doji today in the process of a frypan bottom pattern. A positive open tomorrow would create a bullish Doji sandwich, adding high probability evidence the frypan bottom pattern would be confirming. Applying the evaluation of the results of individual candlestick signals to an


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