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January 4th Market Wrap-Up

Are we in an exuberant market? Although the Dow is now above 25,000, it did not get there with dramatic flair. The candlestick charts reveal the profit-taking that has occurred along the way. The T-line has been an important factor for identifying the trend consistency. Candlestick analysis has some very simple rules which are based upon human nature. The uptrend remains in progress as long as there is not a candlestick reversal signal and a close below the T-line. As witnessed in the current uptrend, although there has been some profit-taking, a dramatic change of investor sentiment is not witnessed based upon the indexes remaining above the T-line. The advantage of this visual analysis allows the candlestick investor to participate in chart patterns that are going to perform much better when knowing there is not any major overall reversal of investor sentiment in the market in general.

The first of the year is usually a time when evaluating what the new investor sentiment is moving into. However, this year's first week of trading reveals the continuation of investor sentiment is continuing in the same manner as before the first of the year. Although this may not sound profound, it allows investors to continue to utilize the best strategies and participate in the current sectors that are moving well. Candlestick analysis has one major benefit over other trading techniques. It shows with a high degree of accuracy, based upon signals and patterns that are created by reoccurring investor sentiment, which areas to have money invested and which areas to move away from.

Good Investing,

The Candlestick Forum Team

 


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