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February 22nd Market Wrap-Up


Candlestick charts reveal an immense amount of information. Today the Dow was up over 160 points. Is that a good bullish indication? The candlestick chart shows something different. It illustrates a lack of decisiveness. Although the Dow was up strong for the day, the candlestick formation revealed indecisive trading based upon the fact that the Dow had traded much higher during the day. At the same time, the S&P 500 close slightly positive but with a very indecisive candlestick formation, a Doji closing right on the T line. The NASDAQ close lower after opening much higher. The candlestick formations illustrate the nature of investor sentiment based upon where price opens and where price closes.

Recognizing individual candlestick signals allows investors to be prepared to enter trades immediately anticipating a high probability result. BYD gapped down and formed a Doji yesterday. A lower open would have immediately demonstrated a bearish flutter kicker signal was in progress. The simple Doji rule, the price will usually move in the direction of how prices open after a Doji formation, allows candlestick investors to establish high probability/high profit trades immediately. Because investor sentiment creates the same signals and patterns over and over, creating high probability patterns, investors can exploit price movements by knowing what the probabilities are after a candlestick signal or pattern appears.


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Good Investing,

The Candlestick Forum Team

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