August 30th Market Wrap-Up
Candlestick signals are extremely profitable for identifying reversals in a market trend, both on the buy side and the profit-taking side. There are some very simple indications of when to start taking profits even before a true candlestick reversal signal has developed. Because human nature works the same way time after time, there are indicators that show when the probabilities of a change of investor sentiment is likely to occur. A strong rally has occurred in the markets after the breakout of the resistance levels this past week. But today's positive trading provided a visual alert that profit-taking could be ready to start. The market indexes have moved excessively away from the T line. There is a very simple T line rule, the further away you move from the T line, the more likely it will come back and test it. When that occurs, candlestick investors have a very easy procedure for seeing when the profit-taking has started.
Candlestick signals are the accumulative knowledge of everybody buying and selling during a specific time frame. The combination of the daily charts and the 10 minute intraday charts provide a common sense/high probability trend analysis. When the indexes/stock prices started moving a good distance away from the T line, the 10 minute chart becomes a valuable tool for taking profits at the appropriate times. Candlestick signals and patterns are the graphic depiction of what is occurring in human nature. When candlestick charts are analyzed accurately, investors have a dramatic probability of producing consistent profits.
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The Candlestick Forum Team
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