December 5th Market Direction
Candlestick chart analysis allows investors to analyze the overall index trends with much more clarity. Today's positive trading indicates the lack of any major selling pressure, the bullish trend is still in progress. However, the individual indexes provide more relevant information. The Dow, although trading higher today, showed a little bit of pullback after its initial opening prices. The NASDAQ traded positive today but did not close yet above the T-line. The uptrend remains in progress but there are minor signs of potential profit-taking/pullback when analyzing each individual index chart. There has not been a change of the uptrending bullish direction of the market. But small analytical candlestick chart analysis indications prepare the candlestick investor to be more alert for profit-takingP>
A major advantage of candlestick patterns is not only recognizing a high probability trade set up but it also can be rationally and logically explained as far as what the next price move will be. The J-hook pattern is occurring in numerous charts. When they become more prevalent in specific sectors, it allows for the simple assumption that those sectors have been trading extremely strong over the past few weeks and profit-taking has occurred. The J-hook pattern is easily identified. The explanation of a J-hook pattern allows for participating in the next price movement with much more confidence. Wave three of a J-hook pattern is the continuation of the strong bullish sentiment prior to some profit-taking. The next wave to the upside is merely the continuation of the initial strong buying. Because wave one and wave three are usually the same magnitude, an investor can calculate when and where to enter a trade and how strong the next price move will be.
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The Candlestick Forum Team
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