Archives for January 2014

Earnings Reports

Stock earnings reports come out over a six to eight week period every quarter. This period is loosely referred to as earnings season. When companies announce their earnings and general financial status their stock prices typically correct for the new information. These stock price corrections are typically in a range of a few percent or less. This is because earnings reports usually come in reasonably close to analysts’ expectations. However, when they are drastically different than expectations a stock price will rise or fall quickly and dramatically. A stock investor or stock trader seeks to anticipate movement of stock prices by anticipating earnings reports. Fundamental analysis of intrinsic stock value and margin of safety are useful in predicting long term stock prices. However, for the short term this next quarter’s earnings reports and estimates of the same drive stock prices. Traders use both fundamental and stock technical analysis in trading stocks. The fundamentals help traders anticipate if reports will be correct and what the long term picture will look like. Tools like Candlestick stock charts help traders profitably read market sentiment coming up to and following the release of stock earnings reports.

With over five thousand publically traded companies in the USA there are a lot of earnings reports. Traders and investors typically focus on companies that they are familiar with or on which they have done research. While companies offer useful information throughout the fiscal year they are prohibited from reporting, or leaking, financial results in the period immediately preceding the release of earnings reports. This leads to a lot of speculation in the stock market news and often gives rise to more rumors than useful information. During this time traders use Candlestick analysis to assess market sentiment and Candlestick trading tactics to trade stocks. There are typically many analysts providing earnings estimates prior to reports coming out. These estimates tend to drive stock prices in the days coming up to the release of each individual report. Then, when the report comes out for a company the estimates turn out to be high, low, or exactly correct. There is commonly a period or stock volatility as the market corrects for the new information. If the correction is large there can be a sort of market inefficiency as traders and investors seen to assimilate the new data.

Stock traders using candlestick patterns as a guide can often profit both before earnings reports come out and immediately thereafter. By recognition of well-known price patterns traders can profitably buy stock, sell stock, or sell short during periods of price fluctuation. A long term investor will simply hope to pick up a bargain if he believes a stock is underpriced before or after reports come out. Traders have a bit more flexibility because stock traders are commonly looking for stock price change, not only stock price appreciation. With Candlestick signals stock, commodities, options, futures, and Forex traders look for price opportunity at all times and not just when earnings reports are due.


Trading Stocks in a Bear Market

When trading stocks in a bear market, traders seek to profit from continued downward movement of stocks and from an eventual turnaround in stock prices . When trading volatile markets, stock traders do well to use solid stock technical analysis tools such as Candlestick stock charts in order to objectively read market sentiment and avoid falling prey to the trading psychology demons of fear and greed. When stock prices are falling, it can be profitable for those engaged in long term investing as well as those involved in day trading . In both cases one needs to be able to anticipate when the market will bottom out. Both fundamental and technical analysis are necessary when trying to predict market trends and market reversal . Fundamental analysis commonly helps investors and traders understand the limits of stock price variation. Technical analysis with Candlestick charts taps into market sentiment and provides an objective view of when the market will turn. When trading stocks in a bear market such as seems to be emerging today Candlestick analysis helps traders spot and capitalize on trading opportunities.

Trading stocks in a bear market can seem difficult when bad news follows the sun across the globe and market after market drops even before the NSYE and NASDAQ open for business. Many choose to sit on cash during periods of high market volatility . But it is often in downward trending volatile markets where stock traders can find the best profits and those interested only in long term buy and hold investing can pick up the best bargains.

Although traders are well advised to keep an eye on the news veteran traders know that the market quickly adjusts for the fundamentals. Smart traders can follow Candlestick patterns during these times in order to anticipate market swings. Smart traders can avoid falling prey to market hysteria by consulting Candlestick patterns in daily trading. Candlestick trading tactics can be used to create profits when trading stocks in a bear market or any market. Candlestick trading gives traders an objective means of predicting stocks prices. Wise use of Candlestick signals reduces the fear factor in trading. Whether on is trading stocks , options, futures markets, commodities , or Forex , Candlesticks are a good guide in a bear market.


Oil Stocks

Oil stocks have fallen dramatically since two months ago. Oil stocks have also remained quite volatile, often offering opportunity to savvy traders skillful at trading bad news gaps. Commodities in general have fallen as traders anticipate another dip to the recession. The European debt dilemma is on the front pages. Oil futures are down as traders expect decreased demand due to a slowing global economy. Although oil stocks don’t currently look good for buy and hold investing they can be profitable in day trading. Using Japanese Candlestick charting, traders are able to objectively assess market sentiment and profitably anticipate stock price changes. Whether trading oil stocks, on oil stock options, or futures on these stocks, traders can use Candlestick charts to gain profits in both rising and falling markets.

The benefit of stock trading versus long term investing in a bear market is that traders can profit from short term market trends and market reversal. Using Candlestick patterns as a guide, traders can buy stock, sell stock, and sell short in oil stocks or any equity. Oil stocks have fallen in response to worries about a second dip to the worst recession in three quarters of a century. The abrupt up and down volatility of the last weeks has investors worried. The same repeated fluctuations in prices of oil stocks have been profitable to traders tuned into technical price patterns. Using Candlestick analysis traders obtain an objective view of market sentiment. Using Candlestick signals traders can avoid the twin pitfalls of fear and greed that too often destroy the best stock trading strategies.

Oil stocks have gapped on opening a number of times recently as bad news drives opening prices below the close of the previous day. Traders can use Candlesticks in trading bad news gaps. The market inefficiency that often follows breaking news keeps many investors out of the market. The same market inefficiency can lead to handsome profits for traders adept at reading Candlestick patterns. Candlestick traders do not become invested in the success or failure of stocks. They maintain objective views of both market sectors and individual stocks. With the use of Candlesticks, traders don’t respond with fear to market changes. Rather they see stock price changes as opportunity and trade accordingly. Oil stocks may well fall farther as investors and traders seek to sell long positions and avoid risk. Options traders can often profit in such a falling market by selectively buying puts on these stocks.

A clear advantage to using Japanese Candlesticks to guide oil stock trading is to anticipate when stock prices have bottomed out and to profit in buying at the bottom of the price curve. There is a sad but recurring tendency for stock investors and stock traders to follow the herd. When things get bad not everyone believes they are bad. When things get worse more traders and investors believe. When virtually everyone thinks that things cannot get worse the market often turns around. But, this is not guess work. Smart traders use Candlestick pattern formations to profitably anticipate when to stop selling short and start buying calls. Veteran Candlestick traders objectively choose when to start buying as the market in oil stocks or other equities bottoms out.


Low Stock Market Volume

Amidst confusing news, stocks traded higher recently on low stock market volume. The world economy is ever so slowly coming out of the worst recession in three quarters of a century. Huge debt burdens plague both the USA and the EU, the two most powerful economies of the world. It seems that every day there is another pronouncement from Europe. One day we hear that Greece will likely default on its debts and cause a ripple effect throughout the EU. The next day we hear that Germany and France will come to the rescue, despite strong political opposition at home. It is not surprising with such confusion that investors and traders find fundamental analysis difficult and have taken to sitting on the sidelines resulting in low stock market volume. Thus it is also not surprising that many technical stock traders are feeling a little uncertain as well. One does well to remember in such times that there is a stock trading system with centuries of experience in trading when there are conditions of high market volatility, confusing market trends, high market volume, low market volume, and seemingly total market inefficiency. Japanese Candlestick charts have been helping make profits in day trading and long term investing for a long, long time.

After several days of a falling market, stocks rebounded recently. The herd mentality that all too often infects the market had everyone believing that a bear market was in the offing. Then, when the market turned upward, many traders and investors were uncertain of what to do and sat on the sidelines while stocks rallied. Traders using Candlestick stock analysis as a guide are able to avoid the distraction caused by the psychology of trading stocks. Candlestick traders commonly look for periods of apparent confusion in the market and use clear and easy to read Japanese Candlestick charting to profitably buy stock, sell stock, or trade options. Japanese Candlesticks have been guiding successful traders for generations.

Going forward those involved in long term buy and hold investing and those whose only interest is scalping profits in a moving market can both profit from the insight that Candlestick charts provide. A lasting value of using stock technical analysis tools is that it gives traders insight into market sentiment even in confusing markets. When there is low stock market volume due to general confusion about fundamentals Candlestick signals and Candlestick trading tactics help traders profit when all others seem to be lost. Low stock market volume or high stock market volume, Candlestick signals help traders and investors anticipate stock price movement. When fundamentals seem chaotic there is still tendency for the market to come to a consensus. Using Japanese Candlesticks, traders are commonly able to anticipate that consensus before those guided only by the stock market news and their sense of shifting fundamentals. Whether trading stocks, options, commodities, futures, or foreign currencies, traders do well to use Candlestick patterns as a guide in reading market sentiment. In the low stock trading volume of today there are profits to be made by those with the tools to see clearly where sentiment will take the market.


Trading Chinese Stocks

Trading Chinese stocks may become a bit dicey due to mounting skepticism about the accuracy of financial data provided by Chinese companies trading as American Depository Receipts in the USA. If financial data provided by Chinese companies, or any companies, trading on US stock markets is suspect this renders fundamental analysis of such stocks worthless or frankly misleading. If stocks trading in the USA misrepresent their financial data they are subject to sanctions by the SEC. However, when trading Chinese stocks as level I American Depository Receipts, traders must recognize that Level I ADR’s do not require substantial financial disclosure. Level I ADR’s are traded over the counter and have minimal reporting requirements with the SEC. No quarterly reports or annual reports are required although such stocks must be listed on at least one foreign exchange and the company must publish an annual report in English on its web site. The report must comply with the laws of the home country but not the regulations for stocks in the USA. Foreign stocks available as Level II and Level III American Depository Receipts have stricter reporting requirements. Ideally, with accurate financial data available to traders and investors both fundamental and stock technical analysis will help gain profits. Traders using Candlestick charts will be able to accurately and profitably anticipate market sentiment. Of valid concern for stock traders interested in trading Chinese stocks are reports of inaccurate financial data even at higher level ADR’s. Those trading Chinese stocks will want follow market sentiment carefully with Candlestick analysis.

A concern of some investors is the state of Chinese banks. Many consider the relationship between banks in China and the Chinese government to be too close. If these institutions are over extended with poor loans China could see a banking disaster similar to what happened in the USA and required a bailout of the industry. Long term investing in Chinese banks and other Chinese stocks trading in the USA might seem uncertain at this time, in light of questions about the accuracy of financial data. However, trading Chinese stocks might still be profitable. Using Candlestick analysis traders can anticipate changes in market sentiment. By buying puts on these stocks in options trading or by selling short traders can profit if the current concern about trading Chinese stocks turns into a rout of these equities.

Our point in writing this article is not to recommend trading Chinese stocks or avoiding them. The point is that by doing a bit of fundamental analysis and keeping up with the stock market news traders can spot stock trading opportunities. While those solely interested in long term investing may sell stock in such a situation stock traders can use Candlestick pattern formations to follow market sentiment and trade in such a way as to profit from rising or falling stock prices. Whether one is trading Chinese stocks and concerned about the accuracy of financial reports or trading any US stocks listed on the NYSE or NASDAQ, using clear and easy to read Candlestick signals can guide traders to profits in any market.


Bargain Stocks

These days of market uncertainty may be a good time for traders to scout for bargain stocks. Euro Zone leaders met in another attempt to come to agreement on the EU debt dilemma. A figured bandied about is €2 Trillion (about $2.6 Trillion in USD) needed to stabilize banks and shore up the national treasuries of countries like Greece, Italy, Spain, Portugal, and Ireland, the so called PIIGS group. When the news carries a story about a possible solution to this problem stocks surge and when a contradicting story follows, stock prices fall. As the world seeks, with varying degrees of success, to extricate itself from the worst recession in three quarters of a century both those interested in long term investing and in day trading are keeping an eye out for bargain stocks. Both fundamental and stock technical analysis are necessary in finding bargains in the stock market. Buy and hold investing works when an investor finds a stock with a strong intrinsic stock value and a good margin of safety. The investor uses technical analysis with Candlestick charts in order to keep in touch with market sentiment and buy stock at the lowest reasonable stock price.

Stock traders have a wider range of options that investors do when trading bargain stocks. When a low priced stock comes in with strong profits and gains the attention of the market its price often jumps accordingly. If stock market news comes out after trading hours the stock will often open substantially higher the next morning. Traders using Candlestick stock analysis who know how to anticipate, or trade after, a breakout gap can often obtain the majority of profits available from such a stock. Sometimes a popular stock disappoints the market despite strong earnings. For example, Apple failed to meet analyst earnings estimates for the first time in years despite a more than fifty percent increase in profits. Thus the market punished Apple with a fall in its stock price. Maybe the fact that the company co-founder has passed away has made investors question the ability of the company to come up with new and exciting gadgets. If Apple falls a bit more based on negative investor sentiment, instead of rising based on its strong fundamentals, it could also enter the world of bargain stocks.

In the stock market of today with so much attention on large US banks being sued for allegedly selling bad mortgages to Fanny Mae and Freddie Mac, bank stocks might fall in the category of bargain stocks. We are not suggesting that anyone engage in bank stock investing or avoid bank stocks but offer the situation as an example of how to find bargain stocks to trade or invest in. Traders following such stocks can use Candlestick patterns to assess market sentiment. Candlestick signals can help traders in commodities, futures, options trading, Forex, and stocks, trade equities that are mispriced due to market inefficiency. By learning the fundamentals of the stock in question and then reading easy and clear Candlestick signals traders can profit in up and down markets, especially in trading bargain stocks.


Anticipating the Stock Market

Stock traders commonly make their living anticipating the stock market and individual stocks. Stock prices fell in the tech sector after Apple reported worse than expected earnings. The US Federal Reserve beige report came out comments on the state of the US economy that only served to make market sentiment more depressed. Indices were down across the board. Many engaged solely in long term investing are waiting for the market to establish a clear bottom in order to profit from buying at the bottom of the curve. Likewise traders look to profit from a market reversal but also profit by selling short or trading options on various stocks or exchange traded funds trading market indices such as the S&P 500 . Making a profit in trading stocks requires skill in anticipating the stock market with both fundamental and stock technical analysis . Anticipating the market and individual stocks requires perspective. While Apple and other tech stocks such as HP and Cisco fell in price recently, Intel went up on a better than expected quarterly report. Using technical analysis tools like Candlestick charts traders are able to tap into market sentiment for stocks and broad market sectors. Using Japanese Candlestick charts traders commonly profit by anticipating the stock market.

Successful stock traders succeed at picking stocks to trade and at trading stocks that they pick. When anticipating the stock market traders first decide which aspect, sector, or stock in the market that they wish to follow. For example, some stocks are less volatile than others in both good and bad markets. Consumer stocks, health care, utilities, and telecommunications are less like to fluctuate in price as greatly as other stocks when the broader market goes up or down. In fact, these stocks sometimes move contrary to the broader market during a downturn as traders and investors buy these so called defensive stocks. Also, these stocks can fall in price during an economic recovery as investors sell stock in these companies in order to add growth stocks to their stock portfolio. No matter which stock or type of stock one chooses to trade the use of clear and easy to read Candlestick patterns helps in anticipating and profiting from the market.

The market reacts to the stock market news. One day the news indicates that the European Union is going to solve its debt dilemma. The next day we read that German voters are angry about spending money to bail out other countries and the debt relief plans are not go going forward. The market acts like a yo-yo, cycling up and down on speculation. Fundamentals are unclear and confusing. Nevertheless the market comes to a consensus and anticipating the stock market is the business of technical analysis. Traders using clear and objective Candlestick pattern formations are able to track stock price patterns. Every day and every hour traders using Candlestick signals read market sentiment and identify price patterns that help predict the next move of the market in general, a market sector, or prices of individual stocks. Whether trading stocks, commodities, futures trading, or trading forex. Candlestick signals help traders anticipate the market.


Candlestick Stock Analysis

While stocks go up and stocks go down traders using candlestick stock analysis commonly make money. There have been many approaches to trading stocks over the years. Those engaged in long term investing believe that well-chosen individual stocks, market sectors, and even the stock market in general will rise in value over the years. They cite historic data going back, typically, to the stock market crash that ushered in the Great Depression. The time period included in their data includes the period of the historic rise of the United States to Superpower status and the fall of the USSR. As Japan, China, and Europe have risen in global prominence this argument has been used less and less. Traders take an objective view of the stock market. Traders recognize the fact that there are growth stocks, dividend stocks, volatile stocks, and stable stocks. All stocks can rise or fall and all are tradable using Candlestick pattern formations. Traders using Candlestick analysis of stocks seek to profit from both the ups and downs of stocks and the market. Traders using objective and easy to read Candlestick patterns as a guide obtain a clear view of market sentiment and are commonly able to profit from market trends, market reversal, and general market volatility. Candlestick stock analysis helps both the long term investor and day trader successfully and profitably anticipate stock price movement.

Candlestick stock analysis provides an objective view of market sentiment. Candlestick charts have a long history, going back to commodity trading of rice in Japan centuries ago. Traders recognized that certain price patterns repeated themselves and that traders could effectively ignore the fundamentals of the market and simply base their trading upon Candlestick patterns. As a Candlestick pattern develops it becomes statistically more likely that a given end result will emerge. A classic pattern is the Doji Candlestick. This vanishingly short Candlestick has long upper and lower shadows. It occurs at moments of market indecision. What this signal indicates is that the stock opened and closed the trading period at roughly the same price but that it tested both higher and lower. The signal only indicates market indecision and not market direction. However, when stocks are trending up or down, and then a Doji Candlestick pattern occurs, it commonly indicates that stock prices will reverse direction. By using time honored signals such as the Doji, traders can profit from candlestick stock analysis.

Traders, unlike long term investors, commonly pick volatile stocks to trade. They may trade stocks directly or may trade options on stocks. In either case easy to read Candlestick signals take fear and greed, the twin bugaboos of investing and trading psychology out of the picture. Candlestick stock analysis helps traders predict stock price direction. Coupled with Candlestick trading tactics these easy to use signals can lead to profits when trading commodities, futures trading, options trading, and Forex as well as stocks. Traders have been profiting from the use of Japanese Candlestick charts since the days when the Samurai roamed Japan.

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