February 22nd Market Direction

The markets revealed the change of investor sentiment over the past two weeks of trading. Note the number of Doji’s that occurred in the Dow. Also note the resistance level the Dow could not seem to get up through. At the same time, the NASDAQ had gap down through the T line. Remember the T line rule – a close below the T line dramatically improves the probabilities the bears are in control. When seeing a close below the T line, the portfolio positioning strategy should be changing immediately. Start taking profits on long positions that are showing potential reversal signals and simple scanning techniques will start identifying which positions to short.

PYPL had formed a bearish left/right combo that closed right on the T line on Friday. This was after Doji signals revealed a reversal was coming. This provided a very simple shorting strategy. The bearish left right combo is an extremely high probability bearish signal. A lower open would confirm the signal as well as illustrate the T line was not going to act as support anymore. Applying the candlestick simple logic allows an investor to be in the right positions at the right time with a high degree of accuracy. Join us Thursday night for our free chat session on when to take profits.



Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team