Profit-taking going into a three day weekend is not unexpected. However, the market indexes have not show anything that has currently changed the uptrend. Wave three of the J hook patterns make the 50 day moving average the likely target, but be aware of events over the weekend that might create either bullish or bearish implications for Monday morning.What allows you to be in the correct trades at the correct time? Recognizing candlestick reversal signals and patterns. If you listen to the news or analysts, you’re going to be wrong most of the time. If you look at candlestick charts and understand what the signals illustrate, you will be correct most of the time. This is what takes the emotions out of your investing. Currently the J Hook pattern remains in progress in the indexes. Assume the uptrend remains in progress as long as the indexes continue to trade above the T line. But also keep in mind, the market trends are still capable of whipsawing based upon news or events. Today’s trading illustrated a lack of movement from where the markets opened. Again, not unusual to see a Doji day before a three day weekend.
Specific sectors continue to act strong. The housing stocks as well as the mortgage stocks continue strong uptrends. Although the Russians and Saudi Arabians agreed on cutting production, crude oil prices eventually traded lower on the day. This is one of the major benefits of candlestick charts. They reflect what investor sentiment thinks about events or decisions. What would seem to be bullish for crude oil prices did not occur. That becomes a clear illustration that the level of cutback may not have been what the market was expecting. Candlestick analysis takes the responsibility of trying to analyze what might happen in the future based upon specific events and moves it over to analyzing what everybody else has decided about those events.
Chat session tonight at 8 PM ET with Guest Speaker Barry Burns. Click here to register.
Good investing,
The Candlestick Forum team.
