July 13th Market Direction

Today’s reversal in the market was expected. Candlestick analysis has a very simple indicator based upon the Japanese rice traders. If you see a gap up in the overbought conditions, start watching for selling. Today the NASDAQ gapped up and traded higher. The logical stop for candlestick investors is the open. Logic dictates that if the prices come back down through the gap up open, profit-taking is in progress. This was also illustrated in the big stocks, AMZN, NFLX, AAPL, TSLA, gapping up in the overbought conditions illustrated the enthusiastic buyers at the top. Today’s gap up in the market indexes was a good alert to take profits in positions that were showing excessive strength in the overbought area.

However, big profits can still be made by identifying the strong signals and patterns. The Biotech’s have been producing excellent profits over the past week. ALT has moved up nicely and showed a profit-taking sell signal in today’s trading. VXRT was identified early in today’s trading based upon the best friend gap up off the T-line, creating a methods rising signal as well as setting up a J-Hook pattern. Knowing what human nature does time after time allows the candlestick investor to take advantage of the potential big-price moves.

 

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07/23/2020 Stock Chat with Stephen Bigalow

July 13th Daily Market Comments

Another positive day in the markets however the red flags are starting to make their presence. The big stocks like AAPL, AMZN, TSLA, and NFLX are starting to show exuberance with strong buying and Today see in big gap ups in the overbought area. This is the area to start looking to take profits. The Biotech’s are still working very well, gold stocks are still in good slow uptrends. Stay predominately long but start thinking about taking profits in charts that have moved nicely over the past few weeks.

 

Weekly Watch list July 13th – July 17th, 2020

The markets may be moving relatively sideways but that makes for a very profitable trading environment for the candlestick investor. As long as the overall market sentiment is not showing any bearish indications, bullish investor sentiment allows bullish candlestick pattern setups to perform with much greater profitability. There is a very simple logic to the profitability of candlestick analysis. The 12 major signals illustrate what is occurring in investor sentiment, demonstrating when a major change is occurring. Candlestick patterns illustrate the buildup of investor sentiment, producing high probability results. But there is a much stronger element when using candlestick signals and patterns. The combination of signals and patterns produce what we call the Top Ranked Signals and Patterns. These combinations produce extremely high probability and high-profit results. Our full-day training on the Top Ranked Signals and Patterns is scheduled for July 25. This 4 to 6-hour training brings all the logic of candlestick patterns into a fine point analysis. This is how you can maximize your time and your profitability. By knowing what signals and patterns produce the strongest results. https://special.stephenbigalow.com/top-patterns

July 10th Daily Market Comments

The sideways mode of the market is still in process. The Dow and S&P 500 trading positive while the NASDAQ is trading slightly lower. However, the NASDAQ is currently forming a second hanging man signal. This warrants watching for any selling from this level, profit-taking in that index. Stay predominately long. Normally, would expect slow trading on a Friday afternoon during the summertime with everybody heading for the beach, but most beaches are still closed. New Jersey beaches, all you might do Today is some windsurfing.

 

July 9th Market Wrap-Up

Today’s weakness in the Dow reveals the sideways mode of the market after it resisted at the 200-day moving average. However, the NASDAQ continues to trade higher. This combination indicates there is no major change of the overall market trend, merely shifting of funds from sectors to sectors. Big profits are being made utilizing the pattern breakouts. The slow curve breakout of ALT produced a 52% gain in the stock and with much greater returns in the calls. This is not to brag about being in a big price move trade, it is basically illustrating how utilizing the information built into candlestick patterns allows investors to be in the correct trade right at the ultimate entry points.

Utilizing the patterns provided by candlestick charts allows an investor to identify the exact time to get into a trade, not having to wait around to see if that trade was going to work or not. Identifying the breakouts instigates adding a position right at the appropriate time. Numerous stocks have broken out of patterns this past week, producing excellent profitable trades. Adding the T-line as an indicator creates a trading strategy that takes the emotions out of when to close out a trade. A bullish price move can be maintained as long as there is not a close back below the T-line. These market conditions enhance the prospects of big bullish price moves when there is a lack of concern of bearish sentiment possibly reversing the markets. Currently, with the market trend more of a sideways mode, identifying bullish candlestick pattern breakouts are further enhanced.

 

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July 9th Daily Market Comments

Political rhetoric still affecting the market trend. The Dow is back below the T-line currently selling off over 400 points. The NASDAQ is trading lower but still trading above the resistance level and above the T-line. Although the markets are selling off, there is still a good percentage of green on the watchlists. Continue to use the T-line as your ultimate indicator.

July 7th Daily Market Comments

Although the Dow is showing some resistance at the 200-day moving average, the NASDAQ continues its steady uptrend. This combination reveals there is no major change of investor sentiment in the overall market trend. The big names continue to trade higher,TSLA, AAPL, NVDA. With the NASDAQ trading positive and the S&P trading lower but above where it opened, and all the indexes currently trading above the T-line, Today’s trading merely reveals profit-taking in specific sectors. Stay long.

July 6th Market Direction

With the market indexes continuing to trade positive, it confirms the uptrend remains in progress as long as the indexes continue to trade above the T-line. The strongest index was the NASDAQ. It actually gapped up and opened at a resistance level and traded positive from there. Economic indicators, such as the manufacturing index was up strong from May to June. This information appears to be overriding the increase in Corona virus numbers. Let the market tell you what the market is doing, the Japanese rice traders professing. We may not know what is producing the bullish sentiment, but candlestick investors do not need to know. Candlestick investors have the benefit of visually analyzing what everybody else’s decision is doing to the market trends. Currently there does not appear to be any exuberant buying in the market. However, TSLA and AMZN have been producing huge profits and are showing signs of exuberance. Be ready to take profits in price moves that are moving too far too fast.

J-hook patterns have produced significant profits. NIO and NIU J-hook patterns produce the prospects of much more upside. The candlestick patterns have produced consistent profits even as the market indexes oscillate. Pattern breakouts are indicating which sectors are now showing new strength. The chemical companies are showing good pattern breakouts ie SQM. CZZ has a very strong chart, showing a kicker signal breakout of a fry pan bottom through the 200 day moving average. This is what we call convergence analysis or 2+2 analysis, the more factors you can put into a visual analysis showing improved probabilities with multiple bullish indications merely improves the probabilities of not only being in a correct trade at the correct time, but a very strong price move.

 

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.

July 6th Daily Market Comments

The Dow is nudging the 200 day moving average again. A breakout through that level would imply much more upside in this market. The NASDAQ gapped up and opened at a resistance level and continue to trade higher. Economic indicators continue to show bullish sentiment. Although the coronavirus numbers have escalated, it appears as if investors are looking past those numbers, expecting better economic environments in the near future. Stay long as long as the indexes continue to trade above the T-line.