June 6th Market Direction

Profitable candlestick patterns have a dual benefit. Profitable candlestick patterns are easily visually recognized and they produce a high probability of expected results. This is to the fact that investor sentiment works the same way time after time. The strongest individual candlestick signal is the kicker signal, revealing a dramatic change of investor sentiment. Profitable candlestick patterns, such as the fry pan bottom, or more compelling, the classic pattern, a fry pan bottom followed by a J-hook pattern, produce high probabilities of the expected price move as well as a substantial profit result. Analyzing candlestick charts allow investors to assess a price move with a much higher degree of accuracy because of the reoccurring nature of investor sentiment. Currently, the lack of direction of the overall market provides a specific trading strategy for candlestick investors. Both long and short positions should be established in the portfolio until the market shows a definite trend movement. The direction of the trend is much more easily assessed when using the graphics of candlestick signals. Today, the Dow failed at a resistance level and pulled back into the sideways trading range. A close back below the T-line in the major indexes would indicate a wave three to the downside.

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