Today the Dow traded much higher, the NASDAQ traded lower, the S&P 500 traded flat. This provides a very simple trend analysis. There is no major change of investor sentiment, the current trend is continuing. This market scenario merely indicates sector rotation. Fortunately, the candlestick investor can easily scan for which sectors have the biggest upside potential’s during specific market trends. The transportation stocks have been showing good strength, indicated by the transportation index. Having the ability to analyze what investor sentiment is doing in specific stock/sectors allows the candlestick investor to execute trades exactly at the appropriate entry levels. This puts the candlestick investor in positions that are later confirmed by other trading techniques.
Combining the analysis of a pattern setting up, getting ready to confirm based upon individual candlestick signals, produces a double confirmation. EB produced the probabilities of a bullish flutter kicker signal at a breakout level upon a positive open. ADS is getting set up for of forming a bullish Doji sandwich breakout of the 50 day moving average, confirming a fry pan bottom breakout. This information has multiple benefits. It allows for the exact entry of a profitable trade. It implies the trade will be profitable based upon witnessing signals created by human nature. It also allows for participating in price moves that are going to be much stronger than ordinary uptrending price moves during a market uptrend. This is a very simple analytical process. The higher the correct trade ratio for a portfolio, obviously the greater the consistent profitable results. Candlestick signals and patterns indicate a price direction with a high degree of probability. Losing trades are easily identified very quickly, closed out, so those funds can be moved to a better probability trade.
Chat session tonight at 8 PM ET.
Good investing,
The Candlestick Forum team.
