Simple logic dictates that when you start seeing indecisive signals in the overbought area, investors can start scanning for potential short positions with a much greater degree of accuracy. Strong bearish candlestick signals allow for identifying which short trades will have the greatest downside strength. Candlestick signals also reveal when a trend is about to reverse. The nature/makeup of candlestick signals allows for identifying when investor sentiment is starting to change. This is been clearly demonstrated in some of the short recommendations we are participating in over the past few weeks.
Although the market is in a downtrend, strong signals such as the kicker signal still provide bullish profits, as demonstrated in our recommendation today in XAIR. However, in a downtrend, scanning for bullish trades becomes less likely to find good bullish trades. Obvious deduction! Knowing which direction the overall market is moving allows for having the appropriate trade positioning in the portfolio. The short trades have been working extremely well.
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Good investing,
The Candlestick Forum team
