The market trend remains easily identifiable based upon candlestick analysis. A change of market trend requires a bullish reversal signal and a close above the T line. Friday, the Dow illustrated a MorningStar signal, producing the potential of a market reversal. However, it needed to trade positive today and close above the T line, which obviously it did not do. The NASDAQ and the S&P 500 also traded lower, failing to close above the T line. This is important because a market trend can be analyzed with an extremely high degree of probability based upon the T line rule. Although the downtrend remains in progress, currently there is evidence of some basing/buying. These market conditions prepare the candlestick investor to be looking for long positions while maintaining short positions that have not produced by signals and closed above the T line. This simple analysis based upon the probabilities of human nature allow your investment abilities to be greatly enhanced by simple trend analysis.
