May 8th Market Direction
The major advantage of candlestick signals and patterns is that you do not have to have a strong market trend to make money one way or the other. As illustrated in today's trading, the market indexes did not show any great movement one way or the other. However, simple confirming indicators used in conjunction with candlestick signals and patterns allow for a much more clear assessment of what the overall market trend is doing. The T-line is a very powerful trend indicator. Simple rule – as long as the indexes continue to trade above the T-line, the uptrend is assumed to be in progress. Even with a lack of overall market movement, candlestick patterns continue to supply excessive profits. This is due to to the reoccurring nature of investor sentiment. Patterns build up because of bullish or bearish sentiment continuing in spite of outside influences, such as the market direction.
The overall market trend is still in an upward direction. The Dow, S&P 500, and the NASDAQ are producing potential J-hook patterns. Any positive trading coming out of these pattern setups imply a few more weeks of uptrending stocks.
The frypan bottom pattern has been producing consistent profitable trades. The major advantage of trading the candlestick patterns is to fold. First, it put you in a situation where the probabilities are dramatically in an investors favor, based upon the historic results of the patterns. Secondly, not only will the direction of the price move be correct, but the results of a pattern breakout usually produces excessive profits, big price moves. This has been witnessed over the past few days/weeks of trading.
We will conduct a "Members Only" chat session tonight at 8:00 p.m EST.
The Candlestick Forum Team
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