The market indexes are experiencing consolidation during the uptrend. The uptrend remains in progress as long as the indexes continue to trade above the T-line. A trend closing below the T-line after a candlestick sell signal is a much stronger confirmation there has been a change of investor sentiment. This is clearly illustrated in the April lean hogs chart, a large bearish engulfing signal last week and a close below the T-line was a strong indication the downtrend was in progress.
The steady uptrend of the markets allow candlestick investors to take advantage of the high profit/high probability pattern breakouts. The bobble breakouts continue to produce good trade set ups. Many stocks will slowly trend up in a slow uptrend of the markets. The advantage of candlestick analysis is it pinpoints which patterns are going to produce greater profits than merely an uptrending stock price. The J-hook pattern and bobble breakout pattern allows for identifying what the next price move will likely be. Wave three will usually be the same magnitude as wave one. This is what allows the candlestick investor to maximize profitability when the trend is moving in the analyzed direction.
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Good investing,
The Candlestick Forum team
