TUESDAY, OCTOBER 16, 2012
"Railroad Tracks" are a very strong signal for bears and bulls alike. To learn in depth about how to read market signals and create balanced and risk managed trades based on reality (rather than magic indicators and imprecise forward looking analyst statements), check out Scott Pluschau's subscriber service and blog.
In Japanese Candle stick analysis, Railroad tracks are a pair of horizontal green and red long bodied candles next to each other (see the left hand of the chart below) with similar opening and closing prices.
The color of the second candle determines the nature of the pattern. If the second candle is red, it's bearish. If the second candle is green, it's bullish.
Today's Nasdaq 100 is revealing an especially bullish pattern, as the railroad tracks come in the larger context of a trend-line being broken to the upside.
(Click on chart to expand)
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