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January 25th Market Wrap-Up


There are two powerful elements built into candlestick signals. Where prices open and where prices close! The Japanese Rice traders said that everything else in between is merely noise. Yesterday the Dow was up 180 points during the day and down over 100 points during the day but finally closed up on the day. Today the Dow traded up and down based upon talk of the value of the dollar. The Dow closed up 138 points today. The transportation index, however, close down 176 points. What does this indicate about investor sentiment? There is no consensus in the market indexes, thus note change of investor sentiment. The uptrend remains in progress while experiencing rotations from sector to sector. Although the NASDAQ and the S&P 500 are showing some selling weakness, there is no indication that sellers are taking control. This would imply there may be some profit-taking but nothing to tell you there is a change of the overall market direction.

Because the graphics of candlestick's reveal what has occurred in investor sentiment after the open, there is an immense amount of information conveyed by each individual signal. An uptrending price may show a positive close at the end of the day but candlestick signals can reveal the price opening higher but closing below where it opened. Although it may have finished positive for the day, the candlestick investor can already assess that there were some selling occurring. Candlestick signals are the accumulative knowledge of everybody buying and selling during a specific time frame. Recognizing and understanding what those signals convey provides a much more accurate evaluation tool than any other technical trading program. Identifying strong sectors and weak sectors is much easier. Identifying strong candlestick individual stock charts in a strong sector dramatically improves the probabilities of being in the right trades at the right time.

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Good Investing,

The Candlestick Forum Team

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