October 10th Daily Market Comments

Where is the market going to go? As a candlestick investor, you do not have to know the answer. You merely have to identify which direction it is currently going and be able to analyze the prospects of reversal areas/support levels. Then it is relatively easy to assess what is happening at those support levels based upon the type of candlestick formation that occurs at those levels. As illustrated, yesterday’s trading formed a Doji in the major indexes. Doji rule! The trend was going to move in the direction of how they opened today. The NASDAQ is currently trading below the low of July. The Dow is likely going to head for the 50 day moving average. The S&P 500 gapped down today showing the 50 day moving average was not acting as support. Implying more downside. Obviously these are good times for the short positions.