The Japanese Candlestick style of financial price presentation is uncanny in its ability to forecast reversals of trend. This has never been more clearly demonstrated than in the very recent history of Crude Oil prices.

On March 31, 2008, May contract Crude Oil prices made a low of $100.45 per barrel. (Today, a "barrel" is pretty much a fiction; but if Crude Oil were widely stored in barrels, each barrel would contain 42 gallons, just to give you a frame of reference). The Candlestick price bar on that day was a long black candle, indicating a fairly substantial "down" day in the market. The next day, April 1, was marked by another "down" day involving a tighter range of movement and a low of $99.70 for the day. On April 3, prices turned upward and closed higher in a strong "up" day, marked by a tall white candle.

Market observers who were watching a "Daily" chart of price action in Crude Oil recognized the Candlestick pattern of these three days, considered together, as a near-classic "Morning Star" pattern, which is a bullish reversal pattern, and positioned themselves for the strong possibility of a substantial rise in prices.

Had they taken such action, it would have proven justified; for during the ensuing two weeks Crude Oil prices exhibited a nearly unbroken strong rise, from the low of $99.70 on April 1 to a high of $115.04 on April 17. That equates to an increase of more than $15 per barrel. Since a rise or fall of one dollar per barrel is worth $1,000, the $15 rise could have meant a profit of about $15,000 to the investor who caught the move.

Since indications are that Crude Oil prices may now have topped and rolled over, we are now watching for the appearance of a Candlestick pattern which should forecast a reversal and the power which will lie behind the inevitable move in the opposite direction.

All by themselves, the Candlesticks are a reliable indicator of the general psychology of the market at any given time. When used in combination with other indicators, they can be the "icing on the cake" in foretelling profitable price moves in any financial market, whether stocks, bonds, indexes, commodities, or foreign exchange. They work in any time frame.

The Candlesticks are coming into more widespread use in Western countries every day. Every investor should take the time and make the effort to learn the basics. It will be one of the most rewarding learning experiences of your lifetime.