April 1st Market Direction
Today's strong trading was merely more than strong bullish trading. The candlestick charts reveal the Dow acted very strong based upon a best friend signal moving the Dow index up to the top of a wedge formation resistance level. Today's trading not only revealed a breach of that level, but it gapped up through that level illustrating a high probability the wedge/consolidation stage was over and wave three was in progress. Wave three is much better identified based upon the strong best friend signal that started the current uptrend. The transportation index showed a very strong candle going through the 200 day moving average, indicating it was not going to act as a resistance level. The gap up in the NASDAQ and the S&P 500 was also a best friend bullish signal. The strength of today's trading implies a high probability of a next major uptrend. Candlestick analysis has many methods of analyzing what the overall investor sentiment is doing in the markets. The big stocks i.e. AMZN, NFLX, NVDA, TSLA were trading very bullish today. Logic dictates, when candlestick signals are showing excessive buying in the stocks that lead the markets up or down, that if they are trading up excessively strong, there is overall bullish sentiment in the markets, no real fear of the Bears starting to take control.
When the markets can be observed as to moving in a particular direction with the confirmation of bullish signals, individual stock charts create that much more probability of trading positive upon confirmation of bullish candlestick signals. As illustrated in SINA producing a bullish kicker signal on Friday, the probabilities of it trading more positive today was merely an enhanced by a positive open in the markets as well as in the stock price itself. This simple analysis allows the candlestick investor to not only be in the correct direction of a trade, but in trades that are going to produce excessive profitability. Candlestick analysis is merely putting the probabilities in one's favor based upon the likely outcome of what human nature has produced as results for the the past 400 years.
We will conduct a "Members Only" chat session tonight at 8:00 pm EST.
The Candlestick Forum Team
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