Archives for May 2019

May 21st Daily Market Comments

The markets still can’t make up their minds, illustrated by the trading above the T-line and back below the T-line, then backup above. This clearly indicates there is no major consensus by the Bulls or the Bears. Both long and short positions are still trading profitably off candlestick signals. Until there is a definite signal confirmed by a close above or below the T-line, have both long and short positions in the portfolio. Obviously, this is a very schizophrenic market to trade.

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May 20th Market Direction

Candlestick analysis provides a high probability trading platform when utilizing the information built into each signal and pattern with confirming indicators. Friday, after a potential reversal signal in the indexes, the uptrend was in the process of confirming but for one final indicator, the T-line. After trading above the T-line most of the day, the closing levels of Friday brought the indexes back down below the T-line. This caused a major question about the uptrend, due to the T line rule. The T-line rule merely states that a downtrend has reversed based upon a candlestick buy signal and a close above the T-line. When the indexes did not close above the T line on Friday, a very simple assumption was created. The uptrend was still in question. The probabilities of the indexes closing below the T-line provides a logical strategy for the candlestick investor. Short positions should not be closed out until the final confirmation, the market indexes closing above the T-line.

The indexes forming a Doji going into the close of Friday, prepared candlestick investors to be ready to short positions on a lower open Monday. A lower open would also indicate the uptrend was not in progress, failing at the T line area. Knowing the direction of the overall market based upon how the premarket futures indicate the market will open after a candlestick signal keeps investors from entering positions that will not be confirming, such as long positions in today’s trading, and directing them to short positions that are confirming. This provides a constant common sense strategy to allow investors to enter appropriate trades and keep them from getting into trades that are not confirming.

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

Good Investing,

The Candlestick Forum Team

 

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May 20th Daily Market Comments

The failure of the indexes staying above the T-line in Friday’s trading was an indication the bullish sentiment was not strong enough yet to start an uptrend. Today’s lower trading, indicated by opening lower after Friday’s Doji’s in the indexes, made it apparent the T-line was still acting as a resistance level. Although the markets are currently trading above where they opened, the strength of the buying has not yet produced evidence a new uptrend has started. The T-line remains a very relevant factor. Continue to have both long and short positions in the portfolio.

 

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May 17th Market Direction

The strong gap down today in the indexes was producing a dismal prognosis for the market trend, not dramatically bearish but definitely taking the wind of the sails of the bullish sentiment. The possibility of a waffling sideways market, indicating the lack of any decisive movement for the short term. What is required to maintain any bullish trend sentiment is for the indexes to come back up and still close backup above the T-line. Until there is strong bullish confirmation, moving the indexes well backup above the T-line, the indecisive oscillating in the markets would not be unexpected, investors trying to figure out whether the recent support levels were going to continue as support. This is a long indecisive prognosis because the markets are still in the stage of figuring out whether this is merely a bounce in a downtrend or whether a new uptrend has started.

 

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May 16th Market Wrap-Up

Candlestick analysis provides a very clear visual result at expected technical levels. The Dow formed a bullish Harami signal right at the 200 day moving average with stochastics in the oversold area. Confirmation of the support of the 200 day moving average was evident over yesterday in today’s trading. The ultimate confirmation was investor sentiment closing the indexes backup above the T line. Simply stated, candlestick bullish reversal signals formed in the oversold area at major support levels and then closed above the T-line. This all provides the visual evidence that there has been a major change of the downtrend. Knowing this, candlestick investors can be aggressively buying knowing what to expect after bullish reversal signals appearing in the oversold condition.

Having the ability to analyze what the overall market trend will be doing allows for the appropriate positioning of trades. Witnessing bullish signals forming in the indexes after a strong downtrend prepares an investor to start covering short positions, when bullish signals start appearing in individual stock positions, and start adding bullish positions back to the portfolio. This analysis helps diminish emotional trading. Because the results of candlestick signals produce high probability expectations, the candlestick investor can recognize when the probabilities are going against existing positions and when it is time to establish new positions in the opposite direction. This allows for identifying which candlestick reversal signals and patterns occurring in individual stock prices make for the highest profit trade set ups.

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May 16th Daily Market Comments

The bullish engulfing signals formed in the indexes yesterday, at likely support levels, are confirming Today. Confirmation required bullish trading and not resisting at the T-line. AMZN formed a bullish left/right combo right at the 50 day moving average. Numerous other stocks formed bullish signals at likely support levels. Today’s evaluation requires seeing the indexes maintaining their strength into the close, closing above the T-line. The Dow, confirming the bullish Harami right at the 200 day moving average, was a good indication that was where buying decisions were being made. Adding long positions today still requires the market indexes closing above the T-line. That would produce a high probability the pullback is over.

 

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05/16/2019 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 05/16/19

During the live event Steve showed you how to:

  • Scan for stocks and ETFs that are prime candidates for making an abrupt pivotal change
  • Pinpoint the exact day a radical price reversal will likely occur so you can strive to be “First Out of the Gate”… buying near the lowest low, selling near the highest high, and earning max possible returns on every trade  
  • Select an out-of-the-money option that has a high-probability of ending up deep in-the-money and producing a considerable profit  
  • And so much more! 

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May 15th Daily Market Comment

Another tweet! Another change of investor sentiment in the markets! The 200-day moving average is acting as a strong support level for the Dow. All the indexes opened lower today but are now currently trading well above where they opened. The indexes appear to be trying to base at levels they bottomed out a month ago. Short positions should now be analyzed with the idea that this might be the area where the Bulls are stepping back in. Any long positions added at this area still require confirmation.

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May 14th Daily Market Comments

The positive trading so far Today are forming bullish Harami’s in all the indexes. However with stochastics not quite in the oversold area, today’s positive trading still needs to be watched with a little skepticism. Obviously a bounce was likely. The bullish Harami forming in the Dow is occurring right at the 200 day moving average area, a logical support level, but it is not unusual to see a bounce early in the day after a big selling the previous day. Any long positions established today require bullish sentiment being maintained going into the close. Note that the current trading of the indexes are well below the T line. Confirmation of a bullish Harami as the possibility of a market bounce back up to the T line area. Again, this would be based upon bullish sentiment being maintained going into the close.

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May 13th Market Direction

Candlestick formations reveal what is occurring in investor sentiment. However, there will be trends that do not reveal whether the Bulls or the Bears are in control on a day to day/time frame to time frame basis. That is what is occurring in the markets over the past few weeks. Fortunately, candlestick analysis has indicators that let investors sleep well at night. The T-line! The indexes have had whipsaw all reactions to the news coming out of Washington, especially in regards to the China tariff negotiations. How do you trade in these type of market conditions? The final confirmation, the T line. Note that after the indexes formed sell signals and close below the T line a few weeks ago, there has been one obvious factor. There hasn’t been confirmed buying above the T line. Why is this important? A simple candlestick observation! When a trend is trading below the T line, the probabilities are greatly favor a downtrend until there is a candlestick buy signal and a close backup above the T line. An uptrend trading above the T line will continue to remain an uptrend until a candlestick sell signal and a close below the T line is witnessed. This is called the T line rule. It dramatically improves the probabilities for allocating the correct positions in a portfolio.

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

Good Investing,

The Candlestick Forum Team

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