January 27th Market Direction

To most investors, Friday showed selling in the market indexes. To the candlestick investor Friday showed a strong candlestick reversal signal. The indexes formed bearish engulfing signals. The bearish engulfing signals were even more compelling sell signals in that they created bearish left/right combos. A left/right combo is a Doji followed by a bearish engulfing signal. That signal is considered one of the top rank reversal signals. And even more compelling that a reversal had occurred was the fact that the indexes created a strong sell signal and closed below the T line. With this all occurring in the overbought conditions, it provided the opportunity to close out long positions that were not maintaining good bullish chart patterns. Did the strong sell signal closing below the T line indicate the magnitude of the selling in Monday’s trading? Definitely not, but what you did do was indicate it was time to be out of long positions with an extremely high degree of probability there would be further selling in today’s trading. It can be visually evaluated that there have been candlestick sell signals during the uptrend of the past two months. However, the sell signals were not confirmed with any closes below the T line. Without that confirmation, maintaining long positions that had been using the T line as a support could be maintained.

Positions that were not closed out and that had traded well below the T line today can be much better evaluated based upon the type of candlestick formation they produced in today’s trading.WDC formed a bearish left/right combo on Friday but it did not close below the T line. Today’s gapped down in price produced a Doji, the lack of any strength after the open. This would have warranted closing out the position if held to the end of the day. Positions such as TWLO, IRBT, and UBER produced evidence the bulls were still in control, opening much lower but closing well above their open. These positions create a much more clear trading strategy based upon how price is open tomorrow. Knowing what should occur after Belthold signals allows investors to make much better assessment on whether to close or continue to hold the positions based upon how the prices open tomorrow. The major advantage of candlestick analysis is knowing what to expect after witnessing candlestick signals and patterns.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team


January 27th Daily Market Comments

The strong sell signals that formed in the indexes on Friday, but Dow forming a bearish left/right combo, created the probabilities of more selling today. Was the magnitude of Today’s selling anticipated? No, but the strong sell signals of Friday implied there was going to be more downside. When the market/stock prices move down dramatically from a knee-jerk reaction, the 10 minute chart becomes the best time frame to see if the markets are going to bounce or continue to show weakness. That allows for closing long positions that are not showing any strength or as an aggressive trader, being ready to buy if it looks like the market and stocks stabilize and start moving back up. Currently with the Dow down 460 points, it is to early to see which direction the markets will move from here.


January 24th Daily Market Comments

Although the markets are still trading above the T-line, the graphics of the candlestick charts are starting to reveal more bearish candles, meaning opening higher but closing lower. Although the trend remains above the T-line, the evidence of bearish presence is starting to reveal itself. Today’s excuse for the markets selling off after a much stronger open is one case of virus in the Chicago area. This does not make for a change of market conditions, merely an added excuse for why investor sentiment is starting to get a little bit bearish at these levels. Continue to take profits on charts that are starting to show weakness.


January 23rd Market Wrap-Up

The markets indicated profit-taking was going to be in progress based upon the evening star signal that formed in the Dow last week. The candlestick investor has the advantage of being able to analyze whether sell signals represent a major change in the trend or merely short-term profit-taking. The early trading Today continued the selloff but the NASDAQ in the S&P 500 demonstrated the T-line was still acting as a support level for the uptrend. The Dow traded down over 200 points early in the day, well below the T-line. Although the Dow closed lower, candlestick investors could clearly see that the bulls were still in control the trend. The Dow closed above where it opened, showing buyers were still in the market. Also, it closed above the T-line along with the other indexes. There is an important statistical factor relating to the T-line. When a price/trend continues to close above the T-line, the probabilities are extremely strong the uptrend remains in progress. Candlestick signals and patterns are the graphic depiction of investor sentiment. The T-line has Fibonacci characteristics. It acts as a natural support and resistance level of human nature. When you combine the analysis of candlestick’s in relation to the T-line, you gain a very strong probability factor for analyzing trends.

Maintaining a position, even when well in the overbought condition, can be done with much more comfort knowing the uptrend continues as long as the price stays above the T-line. This is very will illustrated in the trend of AAPL. This keeps investors in a position when normal human nature wants to take profits because there are profits. The T-line is instrumental when advocating cutting losses short and letting profits run.

Chat session tonight at 8 PM ET. Click here to register. 

Good Investing,

The Candlestick Forum Team


January 22nd Daily Market Comments

The Dow down, the NASDAQ up, the uptrend remains in progress, the indexes continue to trade above the T-line. Maintain long positions, the candlestick patterns are providing strong bullish opportunities, i.e. UBER J-Hook pattern. Although impeachment hearings are going on, the investment community is looking at economic factors, such as housing starts, to make their decisions.

January 21st Daily Market Comments

The uptrend continues to experience profit-taking which keeps exuberance from being exhibited. Today’s lower trading in the markets, although not very aggressive, has the transportation index showing strongest selling. The trend still produces the analytical process of identifying individual stocks/sectors as the top criteria. As always, safety stops be kept in place as the trend continues will in the overbought condition.

01/23/2020 Stock Chat with Stephen Bigalow

In order to download click on the link below, once on the video page you will right click on the video then hit “download” to save to your files.

Stock Chat – Thursday 01/23/20

At the end of the webinar, Steve invited everyone to join him the 4 hour training on “Candlestick Convergence: More Strategies to Take Your Trading to New Levels”

During this 4-hour comprehensive online training event, Steve will demonstrate:

-Why the “halfway point” of certain candles is so crucial to your consistent trading success.

-How to easily recognize candlestick patterns that virtually guarantee successful trades.

-Why the old saying “The first hour is the amateur hour” means nothing to the candlestick trader, and how to exploit that belief to your maximum personal benefit.

-How to tell if the bulls or bears are in control of a trade with just a 2-second glance at a chart, and how to act accordingly.

-How to avoid “fizzled trades” like the plague.

-How a Doji makes the trade entry dirt simple to see.

-What to do immediately after you see the ultra-powerful Kicker Signal.

-How candlestick trading completely removes emotions from trading, enabling your success ratios to skyrocket.

-How you could have banked “the meat of the move” in exploding stocks, like INVN in its monster move from $2.50 to $45 in four months, IPIX from $2.50 to $27.50 in 10 days, AIRT from $5 to $20 in seven days, BCOM up 60% in two weeks, and ENWV’s gargantuan move from $1 to $55 over several months.
… and much more.

Click Here to Register for the Workshop

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January 17th Daily Market Comments

The trend sentiment has not changed. The slow uptrend of today indicates the lack of exuberance. The slow calculated buying creates a much more solid parameter for the uptrend. Continue to stay long, utilizing each individual chart analysis as the top criteria. Numerous J-hook patterns are working very profitably. The uptrend continues until there is the appearance of a reversal signal.

January 16th Market Wrap-Up

Where to most people buy? The Japanese rice traders profess that most investors buy exuberantly at the top. Fortunately, this can be illustrated using candlestick charts. It can be seen that during the steady uptrend, the indexes continuing to stay above the T-line, profit-taking is likely to occur when the indexes move a little bit too far from the T-line. Today’s bullish trading provided an alert. The indexes gapped up in traded higher today. The gap up of a price move in the overbought condition alerts investors of the possibility of exuberance starting to come into the trend. This does not necessarily mean a major reversal of the trend, merely the possibility of profit-taking that might move the trading back down to the bottom of the trend channel, a few days of profit-taking. After a very strong bullish week in the market, profit-taking can be anticipated before a three day weekend. Is this time to close out long positions? Candlestick analysis provides the benefit of witnessing reversal signals, producing the prospects of specific stock moves getting ready to reverse, or the lack of sell signals even during a market pullback implies specific stock trends are still in progress. The candlestick investor gains a huge advantage of knowing when a price move has reversed versus merely a pullback during an uptrend.

The J-Hook pattern has provided some very profitable trades set ups over the past few trading days. The J-Hook pattern produces a high probability entry into a stock price that has been moving up over the past few weeks or months. The probabilities are greatly enhanced when witnessing a J-Hook pattern, created by profit-taking, followed by new buying, that it becomes a good time to be entering an up trending stock price. The common sense built into candlestick analysis provides investors with much better entry strategies than merely buying up trending stocks during an uptrend. Maintaining up trending positions is much more comfortable when using the T-line as your trend indicator. This keeps investors from being whipsawed out of profitable positions.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team


January 16th Daily Market Comments

Bullish investor sentiment is still obvious. Trading above the T-line makes that more apparent. The trading strategy remains the same, stay predominately long as long as each individual stock position does not show sell signals and a close below the T-line. More than likely, most bullish positions moving in a steady uptrend are showing to be in the over bought condition, so have safety stops in place. Investment decisions are demonstrating bullishness based upon economic factors versus impeachment factors.