March 12th Market Direction
The market indexes have moved up over the past two weeks to very important resistance levels. The Dow and transportation index are trading at the 50 day moving average area, the S&P 500 is trading in decisively at the peak of two weeks ago. The NASDAQ continues wave three after breaking out through a resistance level last week. The positive trading of the NASDAQ, in the process of a bullish J-hook pattern offset the indecisive trading of the other indexes. It will be important to see if the resistance levels can be breached within the next day or two. A failure of the resistance levels would continue the sideways mode of the markets. This would make having both long and short positions in the portfolio the most prudent trading strategy. Fortunately, candlestick analysis identifies which stocks/sectors will continue to have bullish profits while at the same time identifying which stocks/sectors will produce the best short profits.
How do you trade a market that can be influenced daily by announcements of political policies? As an individual investor, it is impossible for each one of us to be able to analyze the results of each announcement coming out of Washington. However, candlestick analysis reveals what the overall consensus of investment decisions is doing based upon the announcements.
Tariffs, are they good or bad? As an individual investor, you may not have the time, the ability, or the inclination to analyze whether tariffs are going to produce bullish or bearish movement in today's market. Every TV talking head analyst has professed that tariffs are bad for the American economy. They can point out examples from the past that was support their argument. But the markets are not selling off. Shouldn't they be with tariffs being such a detriment??? Candlestick charts are created by the accumulative knowledge of everybody buying and selling during a specific time frame. Why should an investor pay attention to what the candlestick charts are revealing versus what the talking heads are professing? Obviously most investors are not being influenced by what the so-called experts are telling us. Tariffs today may have a completely different effect than they did 20 years ago, 40 years ago, 60 years ago. Additionally, the prospect of new tariffs being put in place might have a completely different result based upon the parameters of today's economy.
Candlestick charts indicate the actual decisions investors are making, with the knowledge of what effect each political policy, taxation issues, and world trading situations may be influencing stock price movements. Candlestick charts reveal what is actually happening in investors decisions.
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The Candlestick Forum Team
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