August 15th Market Wrap-Up

The market had remain in a very indecisive mode due mainly to tweets and interest rate expectations. But fortunately for candlestick investors there is still very simple trend criteria that allow to make a trend assessment. As witnessed in the Dow, after the bearish left right combo at the T-line, the market started showing support with bullish candlestick signals at the 200 day moving average. A reversal or a bounce? That was easily identified when the indexes could not reach the T-line. This provided the expectation that the Bulls had not yet taken control. As seen over the past seven trading days, there was no continuity in a trend, daily oscillations. But the most revealing criteria remained that the markets could not show a bullish reversal signal and a close above the T line. Although the downtrend seems to be prevalent, the formation of of a bearish J-hook pattern, the Dow is currently trading at the 200 day moving average, a possible support level. It will be important to see how they open the markets tomorrow, revealing the 200 day moving average is going to act as support on a positive open or whether a bearish Doji sandwich demonstrates more downside on a lower open. The advantage of candlestick analysis is knowing what type of signals and patterns will be formed based upon the results of individual signals.

With the market moving dramatically up one day and down the next day, it is obviously very difficult to trade. That provides two obvious trading strategies. First, if the market and individual stock price movement is not showing any consistent direction, there are times when it is much better to sit in cash until a direction can be identified. Or secondly, any positions should have very relevant pattern confirmations to offset the effect of outside influences. Pattern breakouts or very powerful candlestick signals as revealed in TSLA and TLRY provide higher probability price moves that will overcome an oscillating general market.TLRY short recommendation was based upon a very strong bearish kicker signal. TSLA short recommendation was based upon a wedge breakout to the downside. The information built into candlestick signals allow the candlestick investor to take advantage of the most powerful trend movements.



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Good Investing,

The Candlestick Forum Team