November 4th Market Direction

The market indexes all hit new all-time highs, expected based upon the candlestick patterns setting up going into the all-time high breakout levels. The Dow formed a frypan bottom pattern as it moved up toward the breakout levels. The NASDAQ and the S&P 500 performed J-hook patterns which illustrated the wave three of a J-hook pattern would take those indexes out into new high territory. Having the ability to analyze the nature of investor sentiment at specific levels dramatically improves the probabilities of staying in positions through important technical levels. The bullish patterns also developed in the longer-term charts, implying a major new bullish wave was beginning.

When investor sentiment can be analyzed as being consistently bullish, this allows the candlestick investor to take advantage of high profit pattern breakouts. It also provides the opportunities to make big profits in lower-priced stocks that require an overall bullish atmosphere in the general markets. When investor sentiment starts getting bullish across-the-board, news items on individual stock positions produce much bigger profitability when there is little fear of bearish sentiment turning the markets around. The major advantage candlestick charts provide for the candlestick investor is the ability to have a vast majority of portfolio positions moving in the same direction all at one time. Many investors complain that there overall returns are not always great in a bullish market because of some of the positions in the portfolio trading lower even as the market trades higher. Candlestick analysis dramatically reduces having unprofitable positions in the portfolio during specific trends. This is what creates much greater profitability for the candlestick investor.


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

Good Investing,

The Candlestick Forum Team