October 3rd Market Direction

A strong trend indicator is one that works an extremely high percentage of the time. A strong trend indicator that works in conjunction with candlestick signals is the T line. The T line produces a very high probability factor. You do not have to take my word for it! Put the eight exponential moving average on your candlestick chart and notice how often it acts as a support level in an uptrend or a resistance level in a downtrend. You can easily back test it. The most powerful element to this strong trend indicator is the number of times prices reverse right at the T line. The reason this is relevant is that nobody has the T line on their charts. It is not like everybody is waiting to see what it does at the T line. The T line becomes extremely effective for keeping investors from being whipsawed in and out of trades. Here is one of the most powerful statements for trend analysis. If candlestick signals are the graphic depiction of investor sentiment and the T line acts as a natural support and resistance level of human nature, a Fibonacci characteristic, adding the two together produces an extremely powerful trend analysis combinations. Join us on the www.candlestickforum.com. You will see a dramatic improvement of your trading analysis.

 

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Good Investing,

Stephen Bigalow

October 3rd Daily Market Comments

An up day in a downtrend so far. The manufacturing report is apparently producing some hope that inflation is receding. However, there is not any evidence of a major change of investor sentiment as long as there is not a reversal signal and a close above the T line in the market indexes. The same analysis should be applied to short positions that have not yet shown buy signals and closes above the T line.

 

Weekly Watchlist October 3rd – October 7th, 2022

September 29th Market Wrap-Up

Profitable short trades are enhanced when correctly analyzing the overall market trend. Profitable short trades are confirmed utilizing strong sell signals and trading below the T line. As illustrated in CVNA , a strong downtrend is in progress with the evidence of a bearish kicker signal. Strong sell signals, even during a downtrend, provides evidence the bears are still in strong control. Obviously, remaining in short trades has produced excessive profits during this current market downtrend. When will there be a bottom to this market? You do not have to guess at that answer when utilizing candlestick reversal signals.

 

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Good Investing,

Stephen Bigalow

September 29th Daily Market Comments

The T line remains a valuable criteria! Yesterday’s bullish trading produced a non-signal in the Dow and S&P 500. And the indexes did not close above the T line. Today’s gap down in the indexes indicate the bearish sentiment is still in control. Stay predominately short. Any bullish trades require very compelling bullish charts to stay in any long positions.

 

 

September 28th Daily Market Comments

The market indexes are in a potential transition area, oversold, away from the T line, forming a potential bullish Harami today in the Dow and the NASDAQ. However, the final analysis is determined by what the indexes do at the end of the day. Any short positions showing excessive buying, such as kicker signals i.e.NFLX in the oversold area. Close positions, there are better probability trades elsewhere.

 

September 27th Daily Market Comments

Beware the bounce! Note how the indexes were starting to move a good distance away from the T line. This created the potential of investor sentiment producing a bounce back up toward the T line. However, that did not necessarily mean a reversal of the market trend. Positive trading would merely allow the T line to close the gap between itself and the market price. Before covering any short positions, allow the trading to show what it is likely to do going into the end of the day.

 

September 26th Market Direction

Big profits in a downtrend is simplified using candlestick indicators. Big profits in a downtrend can also be maintained using the T line rule, keeping your emotions from taking profits to soon. As witnessed in the market indexes and numerous individual stock charts, the bearish J-hook pattern indicated high probabilities of a wave three to the downside. Knowing the magnitude of wave three, be in the same as wave one, allows the candlestick investor to remain in profitable positions overriding emotional decisions to take profits merely for the sake of taking profits. A major benefit of candlestick analysis is implementing the sage advice of cutting your losses short and letting your profits run. Candlestick charts make that process very easy to implement. The graphics of candlesticks dramatically improves your ability to keep your emotions out of your trading. The current market trend, although in the oversold condition, has not yet showing any signs of a bullish reversal. Is the oversold condition relevant? Of course, but if investor sentiment does not show any change, a market/price trend can remain oversold for many weeks or months. These are market conditions that allow for very attractive put spreads.

September 26th Daily Market Comments

The market indexes are likely to have indecisive trading and/or a bounce based upon the distance they are trading away from the T line. That factor provides a much more reliable analysis of the market trend, the further away you move from the T line, the higher the probability of will come back and test. This produces an alert to be more diligent for watching when to cover short positions on a short-term basis.

 

Weekly Watchlist September 26th – September 30th, 2022

Power pattern trades are the result of the information incorporated into candlestick charts. Power pattern trades are created by the accumulation of candlestick signals and patterns working in conjunction to illustrate high probability results based upon human nature. The current downtrend of the market remains in progress as long as the indexes continue to trade below the T line. However, the distance away from the T line is also an alert that a trend/price is getting overextended. The market indexes are showing potential reversals, not necessarily a major trend reversal, but a possible bounce back up to the T line. The T line rule has the caveat that the further away you move from the T line, the higher the probability it will move back to test it. Note how the market indexes gapped down on Friday. Remember what the Japanese rice traders profess. Where do most people sell? They panic sell at the bottom. That panic selling is illustrated with gaps at the bottom of a trend. The trading strategy remains simple, stay predominately short but be more attentive to the possibility of a short-term bounce.