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Candlestick Trading Forum        

January 14th Market Direction

Was today's lower trading in the indexes showing weakness in the markets? Because of the graphics of candlestick signals and patterns, there are some very logical assessments that dramatically improve an investors evaluation of a market trend. The markets traded lower, but the indexes formed indecisive trading days, Doji's, and they closed higher than where they opened. This illustrates that there was still bullish sentiment in the market, it just opened lower on the day. Having the ability to analyze if the markets have reversed or are merely in a profit-taking stage allows investors to establish positions, either long or short, that will produce a much higher probability of a profit. This could be illustrated in the cannabis stock area. That sector produced a number of strong profitable trades today. Because of candlestick chart analysis, this was not a surprise. The strength of the sector was illustrated by the development of bullish chart patterns over the past few trading days. Recognizing the reoccurring patterns that indicate bullish investor sentiment allows the candlestick investor to allocate trading funds to specific sectors/stocks that have much greater probabilities of moving in a specific direction, in spite of what the condition of the overall market direction.

Whether a stock trader or an options trader, knowing the expectations resulting from candlestick signal pattern setups allows an investor to be in the right place at the right time and enter a trade at the optimal time. This is created by one high probability factor, investor sentiment works the same way time after time. Whether the market direction is strong in a specific direction or just slightly moving in a particular direction, simple scanning techniques allow an investor to identify which stocks are going to perform the best based upon the lack of any major change of investor sentiment in the overall market.

We will conduct a "Members Only" chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team


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