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March 21st Market Wrap-Up

Today's positive trading in the market indexes added additional confirmation the T line was acting as support. The reason this is relevant is due to the fact that the T line acts like a natural support and resistance level. Nobody has the T line on their charts. This means when trends support at that level, it's not because everybody is watching to see what it does at that level. The T line has Fibonacci characteristics. It is a natural support level of human nature. When applied to candlestick charts, which are the graphic depiction of investor sentiment, the combination of a natural support level such as the T line makes that combination a very powerful trend indicator.

Knowing the direction of the overall markets with much more analytical accuracy allows candlestick investors to take advantage of price movements that are at breakout levels. This was illustrated in charts such as ALGN and AAPL. The ability to analyze the overall market trends makes candlestick chart breakouts that much more effective. Human nature is going to continue to act more bullish in charts that have prospects of high profit moves when the overall investment environment does not have any fears of bearish sentiment taking over. When you can analyze the direction of the overall market, but then be able to analyze which sectors will act the strongest in the current market trend, the candlestick investor can do simple scanning techniques to identify which individual stocks will act the best, based upon strong signal or pattern breakouts, in the strong sectors. This is putting all the stars in alignment. The candlestick investor consistently has the advantage of knowing which price movements have the strongest profitable probabilities.




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Good Investing,

The Candlestick Forum Team


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