During an election year, historical studies generally show that markets tend to rise.  Each political party wants to be responsible for economic growth, and therefore, both the Democrats and Republicans take action to stimulate the economy.  Subsequently, for investors, election-years tend to be very profitable.  This profitability can be further enhanced through the proper recognition and evaluation of candlestick pattern formations, which optimize entry and exit points in investment decisions. 

Candlesticks signals, when properly utilized, offer an immense advantage to any individual who is trying to pinpoint the best time to initiate or withdraw from an investment.  The uncanny ability to measure market sentiment allows the trained investor in candlestick analysis an advantage in trading activities.

Developed centuries ago by Japanese rice traders, candlesticks allow individuals to properly gauge what the market is thinking.  Fear and greed are the underlying emotions that propel market price movements, regardless of the direction.  By recognizing that candlestick formations can reveal human emotions, the individual trader can take advantage of demonstrated weaknesses on the part of the masses, producing outstanding investment results.

Capitalizing on election year patterns

An election year presents ample opportunities for investors to capitalize upon market emotion and psychology.  The strength of candlestick signal recognition stems from its visual representation of the human emotions behind the market.

For an election-year investor, this means producing candlestick charts for market indices and specific sectors.  For example, monitoring the charts for healthcare stocks may help you sell short should Obama be elected.  On the other hand, keeping your eye on defense candlesticks will help you ascertain what investors are feeling once Election Day approaches. 

In addition, overall market candlesticks can help you determine whether traders feel bullish or bearish as Election Day approaches.  Concerns over Obama’s negative impact on the stock market may not bode well for investors as the Democrats pull ahead, and bearish signals may appear.  On the other hand, McCain’s overall support of mergers and acquisitions could prompt market psychology to turn bullish should the Republicans gain strength into November. 

The bottom line

In and of themselves, candlesticks signals do not account for election year market movements.  The mastery of the techniques of candlestick analysis, however, during an election year will allow you to establish high probabilities of success in your favor.  

Whether markets are in an election year or not, by carefully studying and mastering candlesticks signals, anyone can develop the expertise to be on the right side of the market with great accuracy. Candlestick analysis, when properly utilized, offers the individual investor the proper perspective on markets by understanding how prices actually move.