December 13th Market Wrap-up
Candlestick chart analysis is extremely effective for identifying trend reversals and trend continuations. It is also extremely effective for identifying when there is no trend bias. Because candlestick charts are the graphic depiction of investor sentiment, simple analysis reveals when a trend is in progress based upon candlestick charts as well as time frames when there is no identifiable investor sentiment bias. That is exactly what is occurring in the current market conditions. The overall market is in a sideways channel. It is further revealing on a daily basis that there is no continuity between the indexes. Today the Dow traded positive while the NASDAQ traded lower and the S&P 500 traded relatively flat. This overall analysis merely reveals the lack of any conviction from the Bulls and the Bears.
The benefit candlestick charts produce is identifying which charts are showing good bullish or bearish trades. These standout based upon the majority of individual stock prices moving relatively sideways. MITK is an example of a scoop pattern that is working as expected even though the overall market trend is lethargic. Simple visual analysis indicates which stocks are moving well when analyzed at the same time that most stock prices are not moving in a decisive manner. There will always be trades that can be identified with candlestick charts.
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The Candlestick Forum Team
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