Candlestick analysis provides a very simple visual confirmation of whether the Bulls are in control or the Bears are in control. Over the past couple of weeks, the Dow and S&P 500 have been trading below the T line. The T line is a very high probability trend indicator. Historic results show that as long as a trend is closing above the T line, the up trend remains in progress. As long as a trend continues to trade below the T line the downtrend remains in progress. Over the past few weeks of trading, the Dow and S&P 500 have been trading below the T line while the NASDAQ has traded above the T line. For the candlestick investor, this makes the trend evaluation relatively simple. The overall market trend was not going to move in any powerful direction one way or the other. Today’s positive trading change that evaluation. Today the Dow closed above the T line as well as the S&P 500 gapping up above the T line and the NASDAQ continuing it’s uptrend above the T line. This provides much more evidence that bullish sentiment is now in control of the market. This allows the candlestick investor to be more aggressive when scanning and implementing bullish trades. It also provides accurate trend assessment that instigates closing any short positions that are starting to show too much bullish sentiment.
Candlestick patterns, in conjunction with the T line, provide an extremely highly accurate trend analysis. It is merely logic put into a graphic depiction. Bullish sentiment witnessed in the big trading stocks such as AMZN, TSLA, NVDA provide additional confirmation there is a lack of bearish pressure in the general markets. Knowing there is better probabilities the market uptrend should continue make scanning for the potential big price move pattern breakouts the better trading strategy for these market conditions.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
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