November 17th Daily Market Comments

The market indexes remain above the T-line, implying the uptrend remains in progress. However, the nature of the uptrend remains the same as the nature of the market for the past few weeks, very choppy. The electric vehicle sector remain strong. Lithium mining stocks are still in an uptrend but experiencing profit-taking today. Although the Dow has sold off today, the NASDAQ is holding up well, another indication today is merely some profit-taking. Crude oil remains around the $41 level. Crude oil stocks have backed off but are still in an uptrend. Stay predominately long.


November 16th Market Direction

What is a major advantage of candlestick investing over most investors trading? Most investors have mediocre returns because even during a strong uptrend, they will hold positions that are not working or even trading lower. Candlestick investors circumvent that mediocrity. Simple scanning techniques allow for identifying which sectors are the strongest and which sectors are not working. This produces the trading strategy for investors to quickly close out trades that are not working and moving to sectors that are showing the best strength. This produces much better returns because all the trades should be moving in the right direction. Currently, electric vehicles, lithium mining, and the oil sector are acting the strongest. Having the portfolio oriented toward the strong sectors during a market uptrend dramatically enhances the profitability of the portfolio.

Lithium mining stocks such as WWR, LTHM and PLL are producing strong returns. There will always be uptrending stock prices in an uptrending market, but the strongest profits come from identifying candlestick reversal signals and patterns that produce much better probabilities of profitable trades. The bobble breakout is a very powerful bullish price pattern set up. The shipping stocks, STNG, FRO, and TNK are all showing bobble breakout potential. Oil stocks have shown support and breakouts at the 50 day moving average making the 200 day moving average likely targets. Taking advantage of the information that is built into candlestick analysis allows an investor to take the guesswork out of which stocks/sectors will work the best. Having the majority of the portfolio positions in the sectors during an uptrend dramatically reduces the potential of mediocrity returns. The more pieces of evidence you can put into your analysis, the better the probabilities of being in a correct trade. Join us this Saturday for a a candlestick training on Convergence Analysis, identifying multiple confirming indicators that dramatically improve the probability of being in the correct trade at the correct time.

Chat session tonight at 8 PM ET, identifying the best sectors.


Good investing,

The Candlestick Forum team

November 16th Daily Market Comments

The vaccine rally! Today’s gap up in the Dow gapped up through the all-time high and trading above that level. The S&P 500 also trading in all time high territory. The prospects of a second vaccine with extremely high favorable results makes the future obviously looked better. The stay at home stocks are selling off and the getting out stocks showing good strength. The indecisiveness of the indexes are becoming less indecisive based upon announcements about the vaccine. Continue to be stock/sector specific but biased toward the upside. Currently, there are no signs of bearish investor sentiment.


November 13th Daily Market Comments

No direction! The markets are having a hard time finding a direction. Up one day down the next day. Be careful of today’s bullish bounce. The same is occurring in individual stock prices up one day down the next day making trading very difficult. When trading becomes difficult, sit back in cash until there is more decisive price movements. Although strong signals and patterns are less plentiful in these market conditions, there are still good trades set ups available.


11/12/2020 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 “Save video as” to save to your files.

Stock Chat – Thursday 11/05/20

November 12th Market Wrap-Up

The bearish left/right combo in the NASDAQ is still the relevant sell signal. The Dow has shown selling after the gap up Shooting Star type signal failed at the recent all-time high in the Dow index. The current selling is likely to bring the Dow back down to test the T-line, after moving up excessively away from the T line. This would imply having short positions in the portfolio. At this point, any long positions should have been closed out if they were showing sell signals and signs of weakness, closing below the T line. This shows the relevance of the Japanese rice traders saying “Let the market tell you what the market is doing.” The market does not like indecision. The current political atmosphere and the increase in the virus cases is producing an indecisive outlook for investors.

There still remain some good long positions as long as they stay above the T line. Simple candlestick scanning techniques also identifies good short positions, as in our recommendations to short RUN and CYH. Candlestick charts also reveal when there is not any clear analysis on a charts movement. This is demonstrated by the big traders, AMZN, NVDA, NFLX, TSLA, not showing any decisive trend movement. Simple candlestick logic implies you do not trade these stocks until there is better definable trend movements. The candlestick charts tell you when to buy, when to sell, and when to stay out of a trade. The more visual evidence that you can apply to candlestick signals and patterns, what we call convergence analysis, the higher the probability the trend will perform. Join us on November 21 for a full-day of training on how to utilize convergence analysis to dramatically improve the probabilities of being in the correct trades at the correct time.


Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.

November 12th Daily Market Comments

The Dow trading lower, the NASDAQ trading higher. This makes the analysis of each individual stock chart the top priority. And enhancing the importance of entering any new trades based upon expected confirmation. These market conditions demonstrate numerous bullish entry potentials opening lower, or bearish potential trades opening positive, not confirming. When the market is not illustrating a definite confirms direction, entering any trades should be done with compelling signals and the appropriate confirmation. The maintenance of existing positions remains the same, use the T line as your trend confirmation.


November 11th Daily Market Comments

Be careful of the bounce! Currently there has not been anything that has changed the recent sell signals in the market indexes. Although the NASDAQ is trading positive Today, it is still being affected by the bearish left right combo and the fact that the stochastics are still in a downward direction. Unless there is a dramatic reversal signal, assume the downtrend in the NASDAQ is still in progress. The Dow appears to have some problems getting up above the all-time high level. Continue to hold short positions and any long positions still require confirmation by staying above the T line.

November 10th Daily Market Comments

Although the Dow is trading positive, it is not showing any great resiliency. A bigger evaluation comes from the gap down in the NASDAQ after yesterday’s bearish left/right combo. The lower trading in the S&P 500 is confirming yesterday’s shooting star signal. The sell signals are confirming. Any long positions that are not showing excessive strength today should be closed out. Short positions are showing much stronger profitability. The sell signals of yesterday provide much stronger probabilities of more downside.


November 9th Market Direction

Warning, warning, Will Robinson! Today’s large gap up held up most of the day but saw selling going into the final hour. This created a Shooting star type signal in the Dow after it had exceeded the all-time high in the market. This may be the classic buy on rumor, sell on news. At these levels and witnessing indecision/sell signals in the Dow, the NASDAQ, the S&P 500, and the transportation index, be ready to take profits. Any long positions that have shown weakness, candlestick sell signals, be ready to close out and start shifting to short positions. There remains a lot of unknowns in the political theater. These market conditions warrant adding short positions to the portfolio, maintaining any long positions that have not shown sell signals, and maintaining a heavier cash position. This means any trades being established should have very compelling buy signals or sell signals.

There are some very strong sell signals, OSTK and LRN had bearish best friend signals formed today. These positions can be shorted on a week market open tomorrow. Investor sentiment may be in a whipsaw mode if investors are watching the Senate race. As a candlestick investor, you may not know the outcomes of specific events that will affect the market, but the visual aspects of candlestick charts allow you to analyze what everybody else is thinking based upon possible future events. A good example is witnessing the airlines stocks opening much higher but closing at the low end of there trading ranges. This produces valuable information as far as continued strength or the lack of continued strength in the sector. On the other hand, the cruise lines open positive, closed positive but indecisively positive. Knowing what to expect after those type of graphics allows for much more accurate assessment of which way the sectors/stocks are likely to move.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.