Ocotber 9th Market Direction
Because candlestick charts show relevant patterns, based upon reoccurring human nature, it becomes more clear when profit-taking is about to occur in a trend. The Dow is a good example. The current J-hook pattern is demonstrating that wave three is approximately equivalent to wave one. The past two trading days have indicated indecisive trading, at approximately the end of wave three. Candlestick charts provide the ability to see when a change of investor sentiment is occurring. When that change is occurring at trading levels levels where a change of a trend is likely to occur, it becomes more clear when the candlestick signals occur at those levels. At the same time, the S&P 500 has formed a Harami followed by a bearish engulfing signal in the overbought condition, making the probabilities of a pullback much more likely.
Utilizing the overall trend analysis allows for quicker executions of trades. If the market is starting to pull back, individual stock charts that are start to show sell signals can be closed with much more confidence that they have reached their peak. On the other hand, candlestick charts they do not demonstrate any sell signals going through obvious resistance levels indicate there is still going to be more upside. This was evident in our recommendation on VNET, continuing it's strong uptrend through the recent high based upon the strength of the best friend/J-hook pattern. Candlestick charts provide two major advantages. They reveal the direction of a price move with a high degree of probability based upon the reoccurring reactions of human nature. Additionally, the combination of very simple confirming indicators reveal not only the direction of a price move but also the price moves that are going to have inordinate profitability.
We will conduct a "Members Only" chat session tonight at 8:00 p.m EST.
The Candlestick Forum Team
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