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October 17 Market Direction

The T-line analysis makes candlestick analysis very easy. If the indexes are trading below the T-line, the downtrend will continue. That was evident in the Dow on Friday after it had gapped up and traded very strong to the upside. However, it finished up on the day but below the T-line. The information built into candlestick graphics allows investors to see exactly what is happening in investor sentiment. With the Dow, as well as the other indexes closing back below the T-line, the very simple assumption was that the downtrend remains in progress.

Applying that same analysis the individual stocks dramatically improves being in trades that are moving in the right direction. If the markets in general are trading below the T-line and individual stocks are trading below the T-line, the probabilities dramatically improve that downtrends will continue. An investor does not need to be a highly sophisticated technical analyst to see what the graphics of candlestick's are revealing as far as trend movement. Amazon is a clear example. After a candlestick sell signals and a close below the T-line, Amazon stock has been in a downtrend. Add the fact that it is being confirmed with the markets in general trading lower dramatically improves the probabilities of being in the right direction at the right time.

 

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

Good Investing,

The Candlestick Forum Team


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