January 7th Daily Market Comments

Today’s profit-taking in the markets is not unexpected after yesterday’s big reversal move. The indexes continue to trade above the T-line. The selling in the Dow is not dramatic. The NASDAQ continues to trade positive, indicating there is no major change of investor sentiment in the overall market trend. The strategy remains simple, stay long in positions that are continuing to trade above the T-line.

January 6th Market Direction

Iranian retaliation! Impeachment! Crude oil spike! Wouldn’t we think each one of these situations could devastate the market uptrend? The major advantage of utilizing the graphics of candlestick charts allows in investor to immediately analyze what everybody thinks the results of outside influences would do to the overall market trend. Friday the Dow was down 230 points, bearish? Candlestick analysis provided two analytical factors that revealed very sentiment may not be taking control. Buying could be detected when witnessing the candlestick formation was showing bullish sentiment, buying occurring after prices opened. Although the Dow closed lower, it was trading above where it opened, indicating the bulls had not left the market. Adding the additional factor that the indexes closed above the T line also provided the statistical probabilities that the bullish trend was still in progress. The same scenario can be applied to today’s trading. The indexes opened much lower but showed buying after the open, to the point where the indexes actually closed above the close of Friday. Once again, today’s close above the T line continues to produce the high probability expectation the uptrend is still in progress. The visual development of individual candlestick formations during an uptrend dramatically improves the prospects of not getting whipsawed out of positions.

The lower open in the indexes also produce the same results in numerous stock prices. Any time prices can be seen to have supported at the T line and then started moving higher creates much greater probabilities the bulls are still in control of the trend. When the big stocks such as AAPL, NFLX, AMZN, NVDA all reveal bullish candlestick formations, this is an additional factor to confirm bullish sentiment is still the overriding market direction. Although the overall market started out much lower today, pattern set ups such as the J Hook pattern provided very easy entry strategies. Our recommendation on NINE was based upon a J Hook pattern set up in an oil sector stock. NINE finished up 22% for the day. Do all pattern set ups produce huge gains? Definitely not, but a major attribute of candlestick analysis is that identifying the patterns that have been created by human nature for centuries allows investors to be in situations where the probabilities of being in a big price move is greatly in their favor.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

January 6th Daily Market Comments

The markets again opened lower but are currently trading back up above where they opened. This has created numerous belt hold type signals, especially relevant in charts that open lower, on the T-line, and are now trading positive, ie AAPL. The belt hold type signals illustrate bullish pressure in the markets after the lower open. The T-line continues to be a relevant indicator. Do not let knee-jerk reactions whipsaw you out of positions.

01/09/2020 Stock Chat with Stephen Bigalow

In order to download click on the link below, once on the video page you will right click on the video then hit “download” to save to your files.

Stock Chat – Thursday 01/09/19

At the end of the webinar, Steve invited everyone to join him at the MetaStock Online Spotlight event on Saturday, January 11th at 10:00 am Eastern. This is a must-see event that features three trading professionals who are eager to share their market insights..
 
 
Steve will show us:
  • How to visually identify a wedge formation set up
  • When you can expect a large price move to occur
  • What to expect from the three basic wedge formations
  • The ultimate timing for entering wedge breakouts
  • Big stock trade profits, huge option trade profits

January 3rd Daily Market Comments

Candlestick formations provide much more clear evidence that Today’s selling is more of a knee-jerk reaction versus a reversal. This is due to the fact that although the indexes are much lower, they are currently trading above where they opened. This merely indicates a lower open followed by buying still participating in this market. It is not time to bail out, watch to see where the indexes closed today in relation to the T-line.

 

January 2nd Market Direction

The first days of trading in a new year usually reflect the investor sentiment of the big-money. Sometimes you see specific sectors that come out strong in the first few days/weeks of a new year because that was the evaluation over the holidays that was going to be the sectors most beneficial in the current economic environment. This is usually indicated by strong chart patterns in those stocks of those sectors. This year, the candlestick charts indicated a different criteria. The T-line had been acting as an effective uptrend support level over the past four weeks. The last few days of training of 2019 showed some selling but without one major candlestick technical factor, the markets cannot close below the T-line. That allowed for the anticipation of what investor sentiment was going to indicate as far as buying/selling going into the new year. Obviously, a negative open would have indicated the selling was still in progress because of the trading below the T-line. As a candlestick investor, the logic is very simple. A positive open would indicate the T-line was still acting as a support level. The magnitude of the positive trading in the premarket futures indicated very quickly the bulls were still in control. This allowed for adding long positions immediately and continuing to hold long positions in the portfolio that were continuing to trade above the T-line. Putting these simple candlestick analytical factors together allows investors to know what to do with portfolio positioning with a high degree of accuracy.

The strength of the premarket futures created high probability entry strategies using candlestick patterns. FTCH had been recommended early in the week based upon a fry pan bottom breakout potential. Charts demonstrating fry pan bottom breakouts such as MAVR and AAPL provide huge investment advantages. The results are usually very predictable as far as direction, even though on any given day the overall market direction may be negative, a fry pan bottom pattern is the buildup of investor sentiment which does not consider the overall market trend has a relevant factor. Additionally, the result of the investor sentiment buildup produces extremely large profits when the pattern breaks out as investor sentiment becomes very confident. Exploiting the information built into candlestick patterns is merely identifying price movements that have resulted in high probability/high profit trade results for hundreds of years. Prices do not move based upon fundamentals, prices move based upon the perception of fundamentals. This is exactly how candlestick signals and patterns are created. Nobody knows what this coming year will produce as far as market results. However, utilizing the information built into candlestick charts allows an investor to much more accurately analyze the overall market trend and then extrapolating that into analyzing the price movement of each individual stock chart.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

January 2nd Daily Market Comments

Happy new year! The markets start out strong again not showing any change of the current investor sentiment that has been exhibited going right up into the first of the year. However, as expected there is some profit-taking which would be putting gains into 2020 for tax purposes.

December 31st Daily Market Comments

The markets are not doing anything of any great magnitude, the indexes trading lower but above where they opened and hovering around the T-line support area. Maintain positions that are continuing to trade above or below the T-line but keep some dry powder ready for going after sectors that are showing the greatest strength on Thursday. The afternoon trading is likely to be very light.

December 30th Market Direction

Today’s selling did not indicate any major change of investor sentiment. The indexes closed at or above the T-line, not reflecting any major change of investor sentiment. This is probably profit-taking and shifting of portfolios before the end of the year. Bullish trending stocks remained an uptrend. The stocks that showed sell signals and closes below the T-line should have been closed out, for two reasons. First, a close below the T-line dramatically improves the probabilities of prices heading lower. Secondly, any stock positions that were showing indecisive trading provided opportunities to convert those positions back to cash. A major advantage of candlestick analysis is recognizing what the big money evaluations were being made as far as anticipating which sectors were being analyzed as the strongest sectors going into the first quarter of the new year. This is easily identified utilizing the stocks signals and patterns that are showing the best strength in specific sectors the first few trading days of the new year. This allows the candlestick investor to immediately produce good profits going into 2020.. Although the markets traded relatively sideways for the past two years, the clearly defined tops and bottoms of interim trends allowed for consistent profitability.

The results of patterns produce not only high probability results but extremely profitable returns. This was illustrated today in our recent recommendation on MAXR, producing a fry pan bottom that broke out today. The major advantage of utilizing candlestick patterns is based upon the expected results of what investor sentiment buildup will produce on a breakout of a specific pattern. LK is also in the process of a fry pan bottom breakout potential. Because investor sentiment reacts the same way time after time, century after century, utilizing the expected results of a pattern puts in investor in high probability trades. The patterns also allow for entering trades right at the optimal time for a breakout to occur. This produces a very simple trading strategy. The expected results of a breakout should produce big profits immediately. The lack of a breakout allows for closing out a trade very quickly and moving on to the next high probability trades set up

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

December 30th Daily Market Comments

Today’s profit-taking allows for assessing existing positions. If you have charts that are not showing great bullish dynamics, even though they are still trading above the T-line, closing those positions and moving to cash is a good strategy. The holiday season, with its slow trading is usually the timeframe when money managers make an assessment of their existing positions and analyzing which sectors will likely be the best place to be positioned after the first of the year.