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January 5th Market Wrap-Up

The direction of the market? The same! The Dow is trading lower and the NASDAQ is trading higher. This puts the current direction of the markets in a sideways mode. Is this making trading hard to make profits? Definitely not, the strong uptrend over the past two months have created a new dynamic in investor sentiment. The sideways mode of the market is merely bullish sectors being offset by bearish sectors, but with both directions having more magnitude. Candlestick analysis allows for the differentiation of trading opportunities in this current sideways market versus the sideways trading of the markets from July to November. There were very few stocks/sectors that traded with any strength either long or short over the summer months. However, although the market indexes have been moving sideways for the past two weeks, specific sectors such as gold and oil have produced strong bullish trades. At the same time, the retail sector has produce strong profits on the short side. There is nothing to currently show any change of investor sentiment in those sectors. Being able to easily identify bullish candlestick signals/patterns as well as bearish candlestick signals/patterns, the candlestick investor can produce very strong profits in the portfolio even when the market indexes are not showing any great movement.

Price patterns allow for participating in the price moves that are going to be much more excessive than merely an uptrending or downtrending prices. Candlestick signals and patterns are easily identified. They also produce very strong probabilities of being in the right trades at the right time as well as producing strong profit potential. The results of signals and patterns are the exact reason why Japanese Rice traders identified those signals and patterns hundreds of years ago. Investor sentiment reacts the same way time after time. You do not have to be a fundamental research expert to identify a profitable trade. Candlestick analysis is the accumulation of all the fundamental research analysts expectations put into a graphic depiction. This is merely taking advantage of what their research has discovered.


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Good Investing,

The Candlestick Forum Team

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