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August 8th Market Direction

Today was the first lower trading day for the Dow for the past 12 trading days. It formed a Doji. Each candlestick formation allows the candlestick investor to assess what is occurring in investor sentiment. A Doji in the overbought condition produces the prospects that a lower open would create some profit-taking, at least back to the T-line. The NASDAQ and the S&P 500 also formed Doji's today in their flat trading range. The lack of any dramatic bullish pressure in those indexes continue to indicate a lack of investor direction. How does this help an investor? It indicates that any investments in the portfolio does not necessarily have to be oriented to the bullish side or the bearish side. The prudent strategy becomes establishing both long and short positions in the portfolio.

The simple scanning techniques of candlestick analysis allows for identifying the strong bullish charts as well as strong bearish charts. Utilizing the information built into very strong bullish signals or bearish signals provides more trading opportunities than most investors have the capacity to handle. This makes for a unique trade scenario. The candlestick investor can use simple cultivating analytical factors to identify the strongest and the best trades set ups from a group of strong candidates.

 

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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