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March 11th Market Direction

The magnitude of a reversal amplify's the change of investor sentiment. Today's positive trading, after a potential reversal signal on Friday, brought the Dow back up to the T line while the NASDAQ and S&P 500 went well through the T line. The magnitude of today's bullish move illustrates that the selling sentiment was pretty much negated. Because the indexes were trading backup above the T line the probabilities of further upside is that much greater. Even if there is some residue selling, it probably would not be strong enough to sustain much more down side. Today's bullish strength in the indexes created numerous bullish reversal signals in individual stocks at major support levels. This provides more evidence that the Bulls may have taken control again.

Candlestick reversal signals in specific sectors allow for pinpointing which individual stocks have shown the strongest reversals. ALGN for example produced Doji's at the 50 day moving average with bullish confirmation bringing the price back up through the T line with a strong bullish candlestick reversal signal, the MorningStar signal. The evaluation of the market trend from here remains relatively easy. As long as the indexes continue to trade back up above the T line, the uptrend remains in progress. This allows for simple scanning techniques to identify which stocks/sectors have the strongest upside potential.


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

Good Investing,

The Candlestick Forum Team

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