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June 29th Market Wrap-Up

Candlestick charts allow for a much more accurate analysis of how a portfolio should be positioned. It is easy to detect and analyze a bullish reversal and an uptrend. It is easy to identify a bearish signal in the confirmation of a downtrend. Obviously this warrants either being predominantly long or short. But candlestick analysis also provides easy visual analysis of when the markets are not moving in one direction or the other. The colors of the candles indicate bearish sentiment or bullish sentiment. When those candles occur opposite each other, making for a sideways direction of the market, this changes the portfolio positioning. It may be time to be both long and short. Simple scanning techniques allows investors to pinpoint which stocks for sectors are acting the most bullish and the most bearish. Out of 10,000 trading entities, simple scanning techniques will always produce more bullish charts and bearish charts than most investors will be able to participate. This creates a major benefit for the candlestick investor. Not only does it create a supply going both long and going short, but it produces enough good trade set ups in either direction to have the ability to cultivate which of those longs are the most powerful to the upside and which of those bearish trades will be most powerful to the downside.

Because candlestick chart patterns are created by a consistent participation of either the Bulls or the Bears, those patterns will usually persist even in the face of the overall market direction going in the opposite direction. Simple confirming indicators create trading criteria that keep investors in a candlestick signal uptrend even when charts look a little iffy. Learning what these confirming indicator nuances reveal allows investors to have a much more confident and clear perspective of overall market trends and more specifically individual stock trends. This is based upon one elementary factor, investor sentiment creates price patterns that can be easily identified exploited. Candlestick charts are merely the graphic depiction of what is occurring in investor sentiment.

 

 

 

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Good Investing,

The Candlestick Forum Team


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