November 7th Market Wrap-Up

The markets moving to new high territory was not unexpected. Why? Because simple expectations of candlestick signals and patterns provide a good format for anticipating the continuation of a trend. Over the past few weeks the Dow was forming a frypan bottom pattern. The breakout level of the pattern was corresponding with recent market highs. Knowing what to expect coming out of a frypan bottom made the expectation of more upside easy to evaluate. Once the frypan bottom breakout occurred, utilizing the T line as a trend indicator provided additional confirmation that the Bulls were remaining in control. Knowing what to expect from specific signals and patterns allows the candlestick investor to be much more prepared and ready to move aggressively at levels that other investors might have some hesitancy. Candlestick analysis is not based upon the anticipation of results from fundamental information. Candlestick analysis is merely the graphic depiction of what occurs in investor sentiment time after time based upon the interpretation of results from fundamental analysis. This is a much more accurate assessment of what prices will likely do.

Utilizing candlestick patterns in conjunction with the T line keeps investors in profitable trades, reducing the flaws of emotional investment decision-making. The recommendation of staying with VSTO was based upon the lack of any sell signals and a close below the T line. Witnessing pattern setups allows investors to enter stock or option trades at the appropriate time as illustrated by the J-hook pattern set up in Tesla. Strong candlestick buy signals, such as the best friend signal, produces a high probability trade results as well as much better than average profit results. This can be seen in buy signals that were developed in PAYS, implying a big upside potential. Investor sentiment is the most consistent indicator for evaluating price movements. You do not have to be a sophisticated technical analyst to quickly learn the results of candlestick signals and patterns.


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Good Investing,

The Candlestick Forum Team