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January 29th Market Direction

Candlestick analysis demonstrates its power patterns more on a day like today. The general market trading off but numerous candlestick patterns continue to trade higher. This is based on a simple factor. Candlestick patterns develop over a period of time. The build up of investor sentiment also takes into consideration what is occurring in the overall market but demonstrates that whatever is occurring in an individual stock is not affected by the overall market conditions. This allows candlestick investors to continue to make big profits with frypan bottom breakout's or J-hook pattern breakouts even though the market in general has traded lower. Candlestick analysis is merely the graphic depiction of what is occurring in investor sentiment in each individual stock position. Simple scanning techniques allow investors to identify which stocks/sectors are continuing to act the most bullish or the most bearish in any market conditions.

Today's selling did not change investor sentiment. Adding a simple trading indicator, the T line, to the analysis of a trend greatly enhances the accuracy of trend analysis. The selling in the indexes today did not show any reversal of the current trend with the indexes continuing to trade above the T line. More defined, the indexes continue to trade above the 3T line, demonstrating the strength of the uptrend. The simple analysis that prices do not move based upon fundamentals but prices move based upon the perception of fundamentals makes the credibility of candlestick signals much more accurate than any other trading technique. If you want to train your children how to invest correctly, start them off with candlestick analysis. It's merely common sense investment perspectives put into a graphic depiction.

 

 

 

We will conduct a "Members Only" chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team


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