22nd March

Since I've been talking about candlesticks alot lately I though I should provide a link (some of the page on doji's was written by me) and to an explanation of this charting technique. Unfortunately it is only possible to learn the basics online, but any of Steve Nison's books are very good if you want to go into any more depth.

However, we now get back to the point. yesturdays action created a dragonfly doji with the high below 6000. normally this would be a bullish signal, however, as we are currently near the recent highs I wouldn't see this as a trading signal, insead it signals that support exists a short way below 6000. This hints that we may be in for a consolidation rather than retracement. This is good news for any bulls out there as it signals a market wanting to move forward. However, it's not nessesarily such good news in terms of a trading signal. It's difficult to get a definite signal from a consolidation as opposed to a retracement, however, it does give us a good zone of support to place a stop.

The market has fought back today to get above 6000, however we have now been left with another inverted hammer. So once again we are being fed with the theme of consolidation as the market shows strength below 6000 but weakness above it.