and The Candlestick Forum
Although the market indexes are trading lower the candlestick formations reveal buying since the open, creating bullish candles. This implies that although the markets appear to be sideways/soggy, there has not yet been any evidence of mass selling. With that analysis it should be implied that the current trend of the market is still in progress, sideways.
Although the markets appear to be in the summer doldrums, the benefit of simple candlestick scanning techniques allow investors is still make excessive profits in a lethargic market. This is merely a process of scanning for the strongest bullish or bearish charts. Once they are identified, the added confirmation of those strong patterns continuing to work is the lack of any major change of investor sentiment in the overall market. This is a numbers probability! With over 10,000 trading entities, scans can identify the strongest changes of investor sentiment in specific stocks or sectors. Once they are identified, the continuation of a price trend can be easily confirmed using relevant indicators that reveal a price trend is still moving in the correct direction. Candlestick signals and patterns are the graphic depiction of human nature, the impetus for price movements. The T-line is a natural support and resistance level of human nature. Utilizing both the signals and patterns with the confirmation of a trend with the T-line produces an extremely powerful and high probability trading platform.
The patterns have expected results. The signals have expected results. OSTK continues to move in a bullish direction based upon witnessing the classic pattern, a frypan bottom followed by a J-hook pattern. The major benefit of utilizing the candlestick signals and patterns is the expected results based upon hundreds of years of observations. The same scenario was applied to the recommendation of AZUL, a scoop pattern that was set up with a best friend signal, a Doji followed by a gap up. When you apply the information built into each individual signal to a pattern set up, an investor dramatically improves their probabilities of being in a correct trade at the correct time as well as a very powerful price move set up. An investor does not need to be a sophisticated technical analyst to utilize the information built into a candlestick chart. Knowing what each individual signal illustrates about investor sentiment produces a very powerful analytical platform for establishing profitable trades.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
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 08/01/19
At the end of the webinar last night Steve offered more comprehensive training on “Projecting Price Targets.”
Although the Dow is trading flat Today, note that the NASDAQ gapped up to where it opened above yesterday’s open. This strength, along with the S&P 500 and the transportation index trading higher clearly illustrates that there is no major selling confirmation after yesterday’s selloff. The T-line remains a viable uptrending support level. Stay long, nothing yet has indicated any selling sentiment in the markets. Strong earnings reports are the catalyst. This is why waiting for confirmation from either the Bulls or the Bears is important when a price/trend is trading right at the T-line.
The T-line remains a strong indicator, acting as an uptrending support level. It makes sitting through a slow uptrending oscillating market trend much more comfortable. Fortunately, candlestick analysis incorporating high probability confirming indicators keep emotions from controlling the decision-making process.
Which direction is the market moving from here? When using a very simple combination to demonstrate when an uptrend may be reversing, it makes the analysis very simple. The combination is witnessing a candlestick sell signal and a close below the T-line. Today’s trading produced a sell signal in the Dow, a bearish Doji/Harami followed by Today’s trading which close the Dow below the T-line. The NASDAQ, S&P 500, and the transportation index all formed a bearish Harami’s but closed above the T-line. This allows the candlestick investor to be ready to close positions based upon very simple analysis. If the markets trade lower tomorrow, confirming the bearish Harami’s and taking the indexes down through the T line, at the same time the Dow is already trading below the T-line, it becomes a high probability evaluation that the sellers are taking control. A positive open and positive trading in the markets? That would clearly indicate the T-line is still acting as a support level. Do these market conditions indicate which way the market is going to move from here? No, but additional information from the current graphics of the candlestick charts produce the information that investors can make high probability trade decisions.
Although the overall market is trading in decisively, simple candlestick scanning techniques allow investors to see which patterns are currently working well. The frypan bottom and the bobble breakout patterns not only reveal high probability trades set ups, but they also produce expected results in spite of what the overall market direction is indicating. Utilizing candlestick patterns is taking advantage of the information that has build up that pattern with investor sentiment accumulating strength that is not immediately altered by a change of direction in the overall market. This produces three beneficial results. First, it indicates the direction of a trade with a high degree of probability. Secondly, the strength/magnitude of the trade is much more profitable than merely trending stocks that are trending in the direction of the market trend. Third, if the overall market direction changes, a candlestick pattern will usually allow for exiting the trade profitably a day or two after the market has changed the direction. Learning how to utilize investor sentiment, the formation of candlestick charts, produces huge advantages for making profitable trades.
Chat session tonight at 8 PM ET. Click here to register.
Good Investing,
The Candlestick Forum Team
The initial knee-jerk reaction to the government investigating the big tech firms is greatly diminished by the fact that although the Dow is still is trading lower, the NASDAQ, S&P 500, and the transportation index after opening lower are now continuing to trade positive on the day.
Yesterday, the Dow was the least decisive index, forming a Doji right on the T-line. Today’s positive trading instigating the Doji rule provides strong indications the T-line is going to act as a support level, the uptrend continues. The S&P 500 is also trading backup above the T-line. The NASDAQ and the transportation index is not showing any bearish indications. Unless there is some severe cause for dramatic selling Today, the assumption has to be that the uptrend of the markets are still in progress.
Is there a new dynamic in this market? Investors have many perceptions about what to do when a trend/price makes new highs. Many investors will decide to take profits. Why? Because prices are a new highs! Candlestick analysis makes a more logical evaluation. Over the past couple weeks of trading, when the markets finally broke out into new high territory, candlestick patterns provided a much different perspective. The movement of the markets into new high territory was based upon a J-hook pattern breaking up through the resistance level of the past 18 months. The J-hook pattern revealed a much more logical assessment of what was occurring in investor sentiment. The results of a J-hook pattern wave three can be easily calculated. It is going to be approximately the same magnitude as wave one of a J-hook pattern. The fact that the markets broke out into new territory based upon a recognizable pattern was more solid evidence that the buying was not a spike breakout but more calculated buying. This provides much stronger evidence that trading in new high territory was calculated, not emotional. The market uptrend, illustrated with candlestick patterns, may be showing a long-term trend, wave three, starting for an extensive bullish move.
The current trend of the market continues to utilize the T-line as a support level. Although the markets have broken out into new high territory, candlestick trend evaluations can be applied to the daily trading of the markets. The T-line, acting as a support level, reveals bullish sentiment is still in progress. Although the trend of the market itself is not aggressively bullish, the lack of any selling pressure allows strong individual candlestick stock charts to continue profitable trading. Bobble breakout’s are producing excellent profits as seen in the Micron trade. A bobble breakout is easily entered upon simple visual confirmation. WDC is in the process of forming the same bobble breakout potential. The advantage of utilizing candlestick patterns is twofold. First it shows the exact entry points and secondly, the results of a pattern breakout usually produces much greater profitability than merely uptrending stocks during a market uptrend.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
July 31st Daily Market Comments
The market direction remains indecisive/flat. This continues the market conditions for having both long and short positions in the portfolio i.e. XLNX and GRUB good shorts, TWTR and numerous frypan bottoms good longs. As long as there is not anything showing a major change of investor sentiment, the sideways mode of this market will still produce good profitable long.