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October 26th Market Wrap-Up

Candlestick breakout patterns provide the visual identification of when huge price moves are starting to occur. This becomes more relevant when the markets in general are not showing any consistency from one index to the other. The Dow has been showing good strength. However, the NASDAQ and S&P 500 have demonstrated profit-taking consolidation for the past few trading days. Those indexes have been trading at or below the T line. The indecisiveness of the markets is probably correlated with the prospects of a tax cut being able to be passed. But the underlying factor is the strength of earnings. Today's trading demonstrated the bearish sentiment in the NASDAQ. The bearish left/right combo of last week brought the NASDAQ below the T line, starting the downtrend in that index. The bullish sentiment has remained consistent in the Dow. Candlestick analysis makes it much more clear as to which sectors are acting the most bullish or bearish. Investor sentiment is based upon the confidence or lack of confidence of the overall investor population. This afternoon, Amazon and Google showed stronger-than-expected earnings, moving those prices much higher. These stronger earning reports in the well followed stocks usually have an overflow effect in the rest of the market.

Knowing that the overall investor sentiment remains relatively positive allows candlestick investors to take advantage of the strong breakout signals. Knowing what each individual candlestick signal illustrates allows candlestick investors to participate in the most bullish price moves.

 

 

Chat session tonight at 8 PM ET with Stephen Bigalow. Click here to register. 

Good Investing,

The Candlestick Forum Team

 


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