A red candle actually indicated that we were ready to bounce off support with a lot of bullish pressure. You have to listen to the tale the tails are telling you. Any candle tail that is above the real body (colored portion of candle) tells that the bulls were not able to hold price up and the bearish pressure moved prices downward. Any tail below the real body indicates buying pressure.

This becomes especially important when price is nearing a level of support and/or resistance. By seeing which force is winning (bulls or bears) we can anticipate a bounce or break of that price level and take appropriate action.

Remember that price gives us clues as to the immediate direction it will go. We just have to be open to viewing it and listen to the tale of the tails!

On a personal note, I just have to share some news. I was just notified that I passed the final exam for the Chartered Market Technician designation. The Market Technicians Association states that the, "CMT designation is the culmination of a certification process in which candidates are required to demonstrate proficiency in a broad range of technical analysis of the financial markets." It is made up of an educational component, an experience requirement, an ethics requirement, and a membership requirement. After a lengthy process (nearly two years!), I am proud to be able to place CMT after my name.