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March 27th Market Direction

The Dow is down today, is that bearish? The graphics of candlestick analysis allow for a clear and accurate assessment as to what investor sentiment was doing today. The Dow is down but it was trading above where it opened. What is the simple logic? The buyers were still participating in this market after trading much lower during the day. Additionally, evidence of buying was occurring at a major technical support level that everybody else was watching, the 50 day moving average. Candlestick formations allow the candlestick investor to immediately assess what investor sentiment was doing at important technical levels. There were also a couple other important indications that the selling was not occurring in today's trading. The NASDAQ opened lower but immediately started trading positive from where it opened. Once again, this indicated there was no dramatic selling pressure occurring once the market opened. Additionally, numerous stock positions that were already in bullish patterns at opened lower but also immediately started showing bullish candles. The graphics of a candlestick chart allows an investor to immediately view the fact that buying is occurring after prices open, revealing there is no follow-through selling.

When market conditions are not demonstrating a dramatic reversal of investor sentiment, candlestick patterns continue to perform in spite of the strength and/or weakness of the overall market trend. This is evident in seeing numerous frypan bottom patterns that opened lower today but immediately started trading to the positive side. Candlestick charts provide a much more visual confirmation for indicating whether the Bulls are in control or the Bears are in control. Simple scanning techniques make it easy to identify specific sectors that are acting bullish or acting bearish.

 

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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