January 30th Market Wrap-Up

Is the profit-taking over? The strong sell signal in the Dow last week, the bearish left/right combo that close below the T-line provided a strong probability there was going to be further selling. The consolidation stage would remain in progress as long as the indexes continued to close below the T-line. Yesterday’s trading continued to illustrate the fact that the indexes could not close above the T-line. This provided clear probabilities there was going to be more selling. Obviously a lot of profit-taking occurred early in today’s trading but the bullish sentiment created a bullish engulfing signal in the Dow with a close right at the T-line. The NASDAQ and the S&P 500 opened lower but managed to close above the T-line. This makes tomorrow’s trading analysis relatively easy. Positive trading tomorrow would be a good indication the bulls are back in control if the market indexes can close above the T line. Unless the market sold off tremendously hard tomorrow, the worst case scenario with Today’s bullish trading would be a sideways moving market. The benefit of candlestick analysis is having the ability to much more accurately analyze the overall market trend based upon the results of candlestick signal confirmation as well as the probabilities better assessed based upon closing above or below the T-line.

Microsoft closed at an all-time high today, Amazon is up over 200 points after very spectacular earnings. These are the type of results that dictates the attitudes of investor sentiment. Candlestick charts cut through all the rhetoric. The China virus, impeachment hearings, or any other outside influences can be evaluated as to whether the bulls or the bears have any change of investor sentiment. Candlestick charts are the graphic depiction of what actual buyers and sellers are doing, not conjecture, actual decisions. The prospects of a continued uptrend still makes for very profitable pattern breakouts using candlestick charts.

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Good Investing,

The Candlestick Forum Team