Market trend analysis is greatly simplified using candlestick signals. The market trend analysis can be refined for short-term trading as well as long-term investment holds. Although the Dow formed a hammered/Doji today, it still trades below the T line. However, the distance between the trading and the T line creates the probabilities that positive trading tomorrow is likely to bring the Dow back up to test the T line, a bounce. The NASDAQ and S&P 500 did a hammer/Doji’s off the major support levels but not quite yet in the oversold area. This puts the Doji rule into effect. The markets are likely to trade in the direction of how they open after today’s Doji’s/hammers. Positive trading would imply a bounce back up to the T line. A lower open would indicate the downtrend was still in progress based upon the Dow reaching the lower support level of the wedge formation and the NASDAQ and S&P 500 forming bearish flutter kicker signals, strong sell signals. Knowing how to use the information built into individual candlestick signals allow traders to get in and out of positions at the most appropriate times.SHOP illustrates the possibility of support at the 50-day moving average. But the Doji rule will indicate how it will trade based upon how it opens tomorrow. This type of candlestick analysis allows a trader to maximize their profitability. Learn the logic built into candlestick analysis.
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Good Investing,
Stephen Bigalow
