Archives for May 2019

The Dow closed out 139 points Today. Does that mean the downtrend is still in progress? Candlestick analysis provides much more information based upon the type of candlestick signal produced on any given day. The Dow closed very close to the top of its trading range today, creating a hammer signal. The candlestick formation provides a much more clear analysis of what is occurring in investor sentiment. A hammer signal, forming near the oversold condition, prepares the candlestick investor for a possible reversal. If not a full-scale reversal, possibly a bounce back up to the T line. Add the analysis of the NASDAQ, which opened almost on the 50 day moving average but eventually closed up near the high end of the trading range provides a much different perspective as far as what was occurring between the Bulls and the Bears. The fact that the NASDAQ closed near the top end of its trading range, well above where it opened, better revealed that the Bulls were coming back into the market after the open. For the candlestick investor, the direction of the market will be much better anticipated based upon what type of trading occurs on the open on Friday after bullish indications occurred during today’s trading.

How does candlestick analysis dramatically remove emotional trading most investors are victims? How often does an investor look at their trades/portfolio and wonder why they are still holding positions that are in a downtrend? Candlestick analysis provides insights into when to sell and when to buy based upon common sense candlestick signals and patterns. Unsuccessful investors are usually holding positions in a downtrend with the hope that the bottom is near and their positions will start going positive again. The problem with this scenario is greatly diminished when being able to analyze and react to signals that tell when there has been a change of investor sentiment. Most investors do not react to what the market is telling them, they are still trading their positions based upon what they hope will happen. Candlestick signals are the results of hundreds of years of visual analysis. Trading against high probability reversal signals is not a winning investment strategy. Learn how to use the information built into candlestick signals, and you will always be trading in the high probability trend directions.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team

The benefits of candlestick graphics allows investors to see immediately what the results are of a big price move on the open. Today, when the indexes opened much lower, it could be seen, especially in the NASDAQ, that the Bulls were stepping right into by. By the end of the day belt hold signals were demonstrated in the Dow and the NASDAQ. The final result was that all the indexes eventually close backup above the T-line. Today’s trading indicated the lack of any follow-through bearish sentiment after the open. The belt hold signals produce visual confirmation that the Bulls were still in control of the markets.

This makes the market trend analysis relatively easy. Positive trading tomorrow would confirm the belt hold signal as well as indicating the indexes were still not going to close below the T-line. If the markets opened lower tomorrow, it obviously reveals the lack of bullish control but today’s trading would indicate lower trading was merely a continuation of consolidation versus a full-scale reversal. This makes the premarket futures tomorrow a very important indicator of the direction of the overall market.

Once again, the benefit of trading candlestick signals and patterns dramatically reduces the prospects of having existing pattern positions producing big losses, if any loss, on a day when the market is trading lower. This can be witnessed in numerous chart patterns, such as the frypan bottom, continuing to produce profitable bullish trades even when the market was selling off or trading lower most of the day. This is based upon a simple observation of human emotions. A candlestick pattern is produced by a build up of investor sentiment, not affected by what is occurring in the overall market trend on a day to day basis.

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

Good Investing,

The Candlestick Forum Team