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November 20th Market Direction

Although the overall market trend is relatively flat, there is one trend criteria that indicates the uptrend is still in progress. The indexes are trading above the T line. This is good investment atmosphere for the candlestick investor. Simple candlestick scanning techniques identifies which stocks/sectors are producing the strongest bullish or bearish signals. Out of approximate 10,000 trading entities, the simple scan techniques very quickly identify the best trades. It is based upon a simple reoccurring factor, human nature. Price movement is based upon investor perspectives. Candlestick analysis is merely the graphic depiction of investor perspectives. The T line is a major factor for confirming candlestick signals. Not only to the signals identify when a major reversal signal has occurred in a trend, but the T line then becomes a very accurate trend analysis tool.

Candlestick analysis not only provides the appropriate times for buying, but easy observations of what usually occurs in human nature allows for the anticipation of when it is time to take profits.SQ is a good example. It has produced a steady Eddie uptrend, consistently trading above the T line. The Japanese Rice traders also illustrate and explain when it is time to take profits. When do most people buy? They by exuberantly at the top. As can be seen in the SQ chart, the uptrend has stayed relatively consistent above the T line but now is currently starting to show some exuberance, moving away from the T line. This becomes a warning to be better prepared for watching for a reversal. Candlestick analysis is the graphic depiction of human nature. Knowing the simple rules of what occurs in human nature prepares the candlestick investor for buying at the appropriate time as well as taking profits at the high probability times.



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Good Investing,

The Candlestick Forum Team

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