January 13th Market Direction

Friday, the market indexes created sell signals that could have potentially seen follow-through Today. The sell signals occurred at the top of the trend channel implying at least a selloff back to the bottom of the trend channel. This would have been an opportunity to take profits had the sell signals been confirmed with the market indexes opening lower Today. However, not only did the market indexes open positive but the NASDAQ in the S&P 500 closed above the open of Friday’s trading. That strength indicated there was no selling pressure on the markets. Knowing what should occur after a candlestick signal allows the candlestick investor to move or not move in regards to closing positions and/or taking profits. The accuracy for analyzing a price trend is dramatically improved by understanding what should occur after candlestick signals. The lack of bearish confirmation in Today’s trading allowed for maintaining bullish positions that had not demonstrated sell signals and a close below the T-line. Having the ability to accurately assess the general market trend allows investors to maintain and/or establish high probability trades set ups in the portfolio. Stocks such as AAPL, AMZN , TSLA, NVDA, the ones that everybody is watching, continuing to move in bullish directions is also additional confirmation that the bullish sentiment continues to control the market trends.

The candlestick patterns continue to provide high profit trades set ups, producing much stronger bullish or bearish trend movement versus merely up trending stocks during an uptrend. The fry pan bottom pattern is creating very strong price moves. Understanding the results expected from a pattern produces better probabilities of being in the correct direction of a trade as well as being exposed to price movements that are going to move with much greater magnitude. The expected results of candlestick signals and patterns create a trading platform that puts investors into high probability results a vast majority of the time.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team