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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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.

Good employment numbers, bad virus numbers, why is the market going up? We do not need to have that ability to figure out why the market is going up. Candlestick analysis merely evaluates what everybody decisions are for either buying or selling. Investing is a forward-looking process. The graphics of the candlestick charts merely reveal that investor sentiment is being influenced by what investors are anticipating for the future. Today’s events and/or facts have been built into the market. Investor decisions are based upon what the expectations are for economic future results. Currently, the market indexes are continuing to trade above the T line. Historic probability-factors indicate that as long prices/indexes trade above the T line, the probabilities are extremely strong the uptrend remains in progress.

Having the ability to analyze the overall market trend allows the candlestick investor to take advantage of potentially strong pattern breakout price moves. The magnitude of these moves are enhanced when knowing the overall market trend is moving in the same direction. Common sense dictates bullish charts are going to have greater bullish strength when the overall market is trading positive. Bearish candlestick price patterns are going to act with more force to the downside when the market, in general, is heading to the downside. This may seem like oversimplified logic, but a major benefit of candlestick analysis is the fact that the chart patterns are created by common sense aspects of what human nature normally does. Currently, J-hook patterns and fry pan bottom patterns continue to work exceptionally well in these market conditions. Our recommendations of APPS, VIVO, ZM and numerous Steady Eddie trending stocks continue to produce good profitability because of a simple trend indicator, they are remaining above the T line.

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Good investing,

The Candlestick Forum team.