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December 15th Market Wrap-Up

The market sold off after the Fed meeting yesterday. Was this a major concern, that a reversal had occurred? Not really, based upon the selling did not produce a reversal signal, merely a down day in an uptrend. Today's positive trading immediately indicated that there was no selling pressure to confirm yesterday's selling. The lack of a candlestick reversal signal allows an investor to better analyze what the current trend is doing. However, the fact that the indexes closed at the lower end of their trading range today, creating the potential of a shooting star signal after yesterday's selling produces some warning that the bullish sentiment is slowly losing steam. The current market conditions warrant being prepared for profit-taking soon.

A safe trading strategy when the markets get in the overbought conditions is the utilization of candlestick pattern expectations. That was illustrated in our recommendation today of AQXP. It was coming out of a frypan bottom. Utilizing the information that creates candlestick patterns give investors a couple major benefits. First it puts investors in situations where the upside potential is much greater than normal uptrending stocks. Secondly, when a pattern is in progress, and the markets in general start turning the other way, the pattern is usually going to continue to perform at least for the next few days/time frames, allowing for better exiting. The graphics of candlestick signals are the depiction of what is occurring in investor sentiment. That can be extrapolated into knowing the direction of a price trend will have expected results in lieu of what the overall market conditions are demonstrating. Big profits can be made from a portfolio that utilizes the signals and patterns that are going to produce high probability/high profit results.

 

 

Chat session tonight at 8 PM with Hubert Senters. Click here to register.

Good Investing,

The Candlestick Forum Team


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