Today’s selling makes a candlestick analysis process very simple to identify. The uptrend remains in progress until you see a candlestick sell signal and a close below the T line. Thursday provided an indecisive Doji type day in the indexes. What was required to maintain the uptrend was positive trading. When the markets opened lower, that was an immediate sign that the bears were taking control. That was more confirmed with the indexes closing below the T line. This is an extremely high probability result using those simple parameters. Anytime you see a candlestick sell signal and a close below the T line, the prospects for the uptrend continuing is extremely low, the prospects for more downside is extremely strong. That visual analysis allows the candlestick investor to immediately start taking profits and closing out long positions that are showing weakness. Adding short positions becomes a much better trading strategy. This is based upon simple probabilities. Anytime a price move closes below the T line, the downward trend probabilities improved dramatically.
Bearish patterns can be easily recognized especially in sectors that are in the limelight. The China virus is implying the cruise lines are going to have much more difficulties making profits until the virus situation is resolved. Which cruise line stocks produced the best probable short positions? Simple candlestick patterns indicated which stocks in that sector has the strongest downside prospects. This is putting the stars in alignment! If you can see what the overall market trend is doing, candlestick scanning techniques can pinpoint which sectors have the highest probabilities of producing down trending moves. Using these simple techniques constantly puts your investment funds in the appropriate direction at the appropriate time.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
