April 2nd Market Wrap-Up

After a bearish Harami on Tuesday, and the markets gapping down below the T-line yesterday, produced higher probabilities that a downtrend was going to start again. However, today’s Bullish Engulfing Signal implied that the selling may not be as pronounced as expected. This makes tomorrow’s trend analysis relatively simple. With the indexes continuing to trade at or below the T-line, the probabilities remain that a downtrend is in progress. But with the bullish engulfing signal closing right at the T-line, a positive open in tomorrow’s trading would provide to relevant factors. The bullish engulfing signal was being confirmed and the trading was back up above the T-line, making a J-hook pattern set up. With the markets trading in an indecisive manner, the candlestick investor has a great advantage of being able to analyze much more accurately what is occurring in investor sentiment. Having the ability to anticipate the next trend movement allows for reorienting the bias/weight of the portfolio. A positive open would imply watching existing short positions to see if they need to be closed. A lower open would imply the T-line was still acting as a resistance level, long positions would need to be scrutinized more closely. When the markets are not moving in a definite direction, it is still feasible for having both long and short positions in the portfolio.

Identifying specific sectors becomes much easier when witnessing strong bullish or bearish signals. Today saw the oil companies picking up strength. The candlestick crude oil chart revealed a strong bounce to the upside. Witnessing numerous stocks having strong signals in the same sector is a better indication the sector is being bought across-the-board by many institutions. This makes individual stock charts in that sector a much higher probability trade. You are not witnessing a renegade bullish signal in a sector that is down trending. The probabilities are much greater that you may be buying a position in a sector that is picking up strength. This was evident in our recent recommendations in HAL and IMO. Bearish charts still revealed maintaining short positions in the cruise lines and numerous retail stocks. Having the ability to identify which sectors have the strongest bullish or bearish charts is enhanced with the use of the T line. Because candlestick analysis is the graphic depiction of human nature, the signals work very consistently. The probabilities are greatly improved when using the natural support and resistance level of the T line. Until there is a definite trend indication, maintain both long and short positions in the portfolio.

 

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The Candlestick Forum team.

April 2nd Daily Market Comments

Be careful, watch the T-line on the Dow. A candlestick sell signal and a close below the T-line has high probability ramifications, illustrated in ZM and LK. The Dow has currently bounced back up to the T-line, it will be important to see what it does from that level. Oil stocks are showing strength with the prospects of Trump getting Saudi Arabia and Russia to reconcile. Have both long and short positions in the portfolio.

 

April 1st Daily Market Comments

The T-line remains a very critical analytical level. Although the indexes produced a strong reversal, today’s trading below the T-line on the indexes indicates the potential of the markets heading lower. It will be important to see how they close the markets Today. The indecisive trend continues to make the analysis of individual stocks and sectors much more critical. Obviously, any positions maintained should have very compelling reasons to maintain. Until the markets can produce an observable trend, bullish or bearish, maintaining a heavier cash position is still the best strategy.

 

March 31st Daily Market Comments

The McMuffin signal is a powerful reversal signal, indicating a trend reversal is likely to have occurred. But more importantly for the candlestick investor, it reveals another important factor. Investor sentiment has changed! The fear selling of the past month now has been altered. The strong candlestick reversal signal indicates investor sentiment is not reacting to all the bad virus news the same way.

March 30th Market Direction

What do the powerful candlestick signals represent? They are the actual buying and selling decisions, not the speculation, not opinions, actual buy and sell decisions. Why is this important? It allows the candlestick investor to see exactly what investor sentiment is doing, cutting through all the “expert” opinions heard on the financial news stations, financial newsletters, and email promotions. Last week the market indexes produced McMuffin patterns. A McMuffin pattern is a MorningStar signal, one of the 12 major candlestick signals, which produces high probabilities of a trend reversal. The MorningStar signal is then followed by a bullish Doji sandwich. The expected results of a Doji sandwich is more upside. When you combine the two signals, a morning sandwich/McMuffin, it produces extremely high probabilities an uptrend is going to remain in progress. Add the factor of the trend remaining above the T line enhances those probabilities. Witnessing the big stocks, AMZN, NVDA, AAPL, NFLX all producing good bullish chart patterns is additional evidence that bullish sentiment has now come back into the markets.

Why is it important to be able to accurately analyze the overall market trend? It allowed for candlestick investors to be participating in the downtrend when the first sell signals appeared in the market trends close below the T line. The McMuffin signal components illustrated when the downtrend had reversed. This allows for simple scanning techniques to find the strongest bullish sectors, then scanning for the strongest individual stock charts in those sectors. This puts the stars in alignment, the probabilities put greatly in your favor. The REIT sector is showing across-the-board buy signals. Numerous specialty medical supply companies are obviously working well in these market conditions. Knowing which sectors are acting the strongest allows the candlestick investor to pinpoint the best trade set ups.

CMD and DNLI our recent recommendations that illustrated good strong chart patterns based upon the current virus situation. You do not have to know formulas, you do not need technical analysis skills! You merely need to visually recognize and understand what candlestick reversal signals are illustrating about human nature. Do not complicate investing. Candlestick charts keep it simple.

 

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.

March 30th Daily Market Comments

The McMuffin pattern is still the predominant indication of investor sentiment. The virus news seems to be just as good/bad as it has been for the past few weeks. How should we analyze that? We don’t need to, the McMuffin pattern produces extremely high results. We do not need to analyze how the current news is affecting the market, we just need to analyze what everybody else thinks the news is doing to the market trend. Keep the analysis simple.

04/02/2020 Stock Chat with Stephen Bigalow

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Stock Chat – Thursday 04/02/20

Weekly Watchlist March 30th – April 3rd, 2020

Wouldn’t you like to put all the probabilities in your favor? Candlestick analysis does that for you. With great accuracy, you can analyze the direction of the overall market. You can then analyze which sectors are showing the strongest charts. And finally, you can identify which are the strongest individual stock chart candlestick signal/patterns that will produce the strongest price moves. This is putting all the stars in alignment.

This past week, the market indexes produced an extremely high probability reversal pattern, the McMuffin. Simple logic! The McMuffin is formed with a MorningStar signal, one of the 12 major candlestick reversal signals. Expectation? An upside reversal. It was immediately followed by a Doji sandwich, also producing high probability results, more upside. Adding these two signals together produces double the probabilities of more upside.

When you can see the direction of the overall market, simple candlestick scanning allows for the identification of which sectors are producing the strongest signals. Then it is a simple process to scan each sector for the strongest individual stocks. You now have identified trades that give you the highest probabilities of not only moving in the correct direction, but also with good strength.

The REITs are producing strong reversal patterns. Watch these stocks, VTR, ABR, EFC. The shipping sector is producing good bullish patterns. STNG, TNK. The specialized health sector has shown good reversal signals, APT, SDC, TVTY, EHC.

You will discover that you can sleep much better at night knowing that you have established positions in strong sectors enhanced with the strongest individual stock chart patterns in those sectors. Take advantage of this information, there are hundreds if not thousands of stock charts that are showing potential reversals. You want to be able to elevate your profitability by being in the best bullish charts.

March 27th Daily Market Comments

The markets are still being affected by the political garbage of Washington. But the underlying factor remains that the McMuffin signal in the indexes of the past few trading days produces strong probabilities the uptrend is in progress. The T-line now becomes the trend indicator. The uptrend remains in progress as long as the indexes continue to trade above the T-line. Witnessing the premarket futures showing that the markets were going to open much lower is an immediate indication that any bullish signals created yesterday were probably not going to confirm. This keeps you out of trades that are working just yet.

 

March 26th Market Wrap-Up

The McMuffin pattern! Not a very sophisticated sounding pattern but it is extremely reliable. It is formed by the Morning Star signal, one of the 12 major signals, followed by a Doji sandwich. In short, a morning sandwich, the McMuffin. These are the type of visual analytics that allow candlestick investors to start adding to long positions with great confidence. The MorningStar signal provides the expectation that a reversal is occurring. The Doji sandwich indicates more upside. The combination of a MorningStar signal followed by a Doji sandwich is a double confirmation that the bulls have taken control. This is provided visual recognition of high profit trade set ups. The important factor is being able to identify when there is a change of investor sentiment. This allows for entering trades that have upside potential well before everybody else is starting to move in. Boeing for example, trading it $99.00 four days ago is now trading at $180. There are numerous stocks that have produced very strong reversal signals that have the potential of doubling in a very short time frame.

Being able to identify the strongest top ranked candlestick signals and patterns allows an investor to make hay while the sun shines. You obviously want to be able to find the stocks that are going to move the strongest when a market is moving in the correct direction. Candlestick reversal signals allow you to identify which price moves are going to be much stronger than the normal price moves of most stocks. Adding confirmation indicators such as the T line dramatically improves the probabilities that an uptrend is in progress. This allows for identifying the target areas that will produce the biggest returns during the current trend. Utilizing the high profit candlestick patterns also produces high probability trade results based upon the exact entry points. There are numerous stock charts revealing top ranked reversal signals that have the capability of producing very strong profits. Why? Because investor sentiment can be clearly identified as to the strength of a price move through simple visual identification of the strongest reversal signals.

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

Good investing,

The Candlestick Forum team.