November 25th Market Direction

The anticipation of the markets continuing higher was illustrated by the indecisive candlestick formations supporting on the T-line. This simple visual analysis allows a candlestick investor to assess the strength of the selling during a pullback/downtrend. Today’s positive trading confirmed the T-line was going to continue to act as a support and illustrated J-hook patterns in the major indexes. The J-hook pattern implies more upside, adding additional evidence the uptrend remains in progress. Because the candlestick signals and patterns are the accumulative buying and selling decisions of investors, having the reason for why the markets are trading higher is not required when doing candlestick analysis. Identifying the reoccurring patterns and price movements is all a candlestick investor needs to interpret. The lack of trade agreements, impeachment hearings, Washington indictments, are not affecting investor decisions. The importance of candlestick analysis is merely evaluating that investors are currently buying.

Price trend analysis can be accurately enhanced by knowing what each individual candlestick signal is revealing during the development of a price pattern. Additionally, the appearance of individual candlestick signals at important support and resistance levels merely reveals to the candlestick investor what the major decisions were made at those levels. As illustrated in our recommendation on ZM, a trend kicker signal, a very strong bullish signal, occurred right at a frypan bottom breakout level which coincided with a 50 day moving average. Identifying a combination of candlestick analysis factors dramatically improves the probabilities of being in the correct direction as well as a strong price move. Analyzing a price move after a breakout situation is much more accurately evaluated based upon simple trend analysis incorporating the T line. Having the ability to analyze the overall market direction dramatically improves the probabilities of being in strong bullish candlestick patterns. The magnitude of the moves of a pattern breakout is much greater than merely holding uptrending stocks during an uptrend.


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

Good Investing,

The Candlestick Forum Team