October 23rd Market Direction
The graphics of candlestick signals allows investors to get a much more in-depth perspective of what is occurring in investor sentiment. Although the markets are not off with any great magnitude today, all the indexes had opened higher but were trading below where they opened. The NASDAQ has formed a bearish engulfing signal and appears to be closing below the T line. The S&P 500 is forming a bearish engulfing signal after gapping up on Friday in the overbought condition. This may not illustrate a full-scale reversal is about to occur but at least it indicates there is likely to be some profit-taking/consolidation in the markets over the next few trading days. That would make taking profits in individual stock charts the viable strategy based upon high expectations that the overall market is going to be soft for at least the next few trading days.
Candlestick charts demonstrate the obvious. After good news/positive earnings for Netflix, the anticipation would have been the stock moving much higher. However, a Doji, hanging man, Doji, then a close below the T line clearly indicated that the Bears have taken control even when the overall market was still trading positive. AMZN formed a bearish engulfing signal with a booster, followed by a gap down below the T line clearly indicating the uptrend was over. The prospects of a trend channel is much more evident utilizing the graphics of candlestick signals. This allows a candlestick investor to make much more concise and accurate trades based upon witnessing where a support and resistance level would be occurring and what candlestick signals occurs at those levels.
We will conduct a "Members Only" chat session tonight at 8:00 p.m EST.
The Candlestick Forum Team
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