The definition of a bull market is an uptrending market in spite of massive negative news. The indexes continue their uptrend in the trend channel with both the Dow and the NASDAQ continuing to trade above the T-line. Today’s positive trading occurring even though the news broadcasts filmed dozens of cities being burnt. Candlestick charts reveal what is actually occurring in investor sentiment versus what each of us may think should be occurring in the market trend. The slow uptrend of the markets indicates the lack of any great exuberance, merely steady buying. These types of market conditions allow for the candlestick patterns to work excessively well, not having investor sentiment concerned about any selling pressures. The J Hook pattern has produced a very good profits. Patterns have two major advantages. They produce extremely high probabilities of a direction of a price move and they also provide price moves much stronger than merely up trending stocks during an uptrend. Knowing the results of candlestick signals and patterns give you a competitive edge.

ZM and CRWD produced very strong profits, a scoop pattern and a J-hook pattern. BYND is setting up for a scoop pattern breakout if it opens positive tomorrow. There have been numerous J-hook patterns setting up and producing profits ,FVRR, FSLY, DOCU, OKTA , and many more. Knowing which patterns will produce the biggest profits during an uptrend allows investors to maximize profitability when the markets are trading positive, essentially optimizing the term making hay while the sun shines. Candlestick signals and patterns dramatically improve the probabilities of making profitable trades and participating in trades that will produce large profits.

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The Candlestick Forum team.

The indexes produced some potential candlestick sell signals today. The Dow formed a Dark Cloud signal in the overbought condition. However, it is still trading an uptrend above the 3T line, let alone the T line. This implies there might be some profit-taking pullback but not necessarily a full-scale reversal. The NASDAQ, after forming a Hanging Man type signal yesterday, formed a Shooting Star Doji today. This makes the premarket futures a valuable insight into whether there’s going to be some profit-taking over the next few days. A lower open would imply profit-taking tomorrow. This allows the candlestick investor to make a much more accurate assessment as to whether to take profits in long positions and add a few short positions to the portfolio. Numerous bullish positions showed indecisive/bearish potential signals today. The position cultivation process becomes simple when witnessing potential sell signals in overbought conditions. This allows for candlestick investors to take some profits in the higher risk positions that already have produce good profits and move those funds, either to short positions or long positions that are just now showing bullish signals in the oversold condition. This improves the probabilities for producing better profit potential, with less risk.

Our positioning yesterday in TGI was based upon seeing a Fry Pan Bottom breakout going into earnings. Simple logic, candlestick analysis is the graphic depiction of everybody buying and selling during a specific time frame. If there is strong buying going into the close just before an earnings report, logic implies that people, that know what is going to occur in the company’s earnings, are buying. The probabilities will put you in the right position at the right time. The candlestick patterns continue to work well, Fry Pan bottom’s continue to show good profitability

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The Candlestick Forum team.

Investor sentiment is looking for good news! That can be seen in the candlestick charts revealing a steady uptrend in the overall markets with good strength exhibited on good news days. Another announcement of a potential vaccine provides bullish sentiment, anticipating the virus debacle will soon be over. It can be assumed as long as the market indexes continue to trade above the T line and in the up trending channel’s, the uptrend will remain in progress. The longer the indexes continue to trade in a slow uptrend, the investor sentiment will change from expecting a retest of recent lows to anticipating if the markets can reach the high levels before the virus downtrend. Candlestick investors have the advantage of witnessing the strength of individual stocks based upon pattern breakouts. The breakouts become much more potent if the underlying market sentiment is not showing any bearish fears. Currently, the gap up in today’s trading produces better probabilities of the Dow heading for the 200 day moving average. This would imply a few more days of up-trending markets.

Crude oil prices continued to move higher. Having the ability to analyze a commodity provides additional evidence of a sector move. Oil stocks are continuing their up-trends. Simple visual analysis allows investors to participate in the strongest sectors, such as oil stocks as oil prices are recovering. The specialty retail sector has produced some very strong profits. Regional airlines showed good strength today with numerous best friend signal breakouts through resistance levels. Many stocks will move up during a slow up trending market. Knowing the strong bullish signals allows the candlestick investor to take advantage of the sectors/stocks that will show the most strength during an uptrend. Utilizing the T line in conjunction with candlestick signals provides a very high probability trend confirmation indicator. The strong profit combination is the identification of a strong candlestick bullish signal and then maintaining that position as long as it stays above the T line. This dramatically improves an investors profitability.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.