November 8th Market Wrap-Up
After a strong week in the indexes, it was not unexpected to see some profit-taking today. It was more evident that was profit-taking versus selling back off based upon the indecisive candlestick signals that were created in today's trading, Doji days. However, there were some other indicators that might anticipate more profit-taking. The Dow had a big day on Wednesday, gapping up in the overbought condition. This is a clear indication of potential exuberance. Because tomorrow is Friday after a strong week in the market, lower trading on the open tomorrow would provide the probabilities that the indexes are pulling back to test the moving averages that they just broke through. This provides the opportunity to take some profits in positions that are start to show a little bit of weakness and may be the confirmation of a candlestick sell signal. Week trading in the markets tomorrow does not necessarily mean the market will be in a cell reversal, merely some profit-taking potentially back to the 50 day moving average support level in the Dow. Having the ability to see visually what investor sentiment is doing at important technical levels that everybody else's watching allows the candlestick investor to produce much more aggressive trades knowing exactly where the selling has started and where the buying might be coming back into a trend.
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The Candlestick Forum Team
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