Archives for September 2019

Today the market indexes produced Doji’s, showing some indecision as the markets approach the recent all-time highs. With the indexes in the overbought condition, the tweets about China trade talks make the investor sentiment that much more sensitive. Today’s Doji makes tomorrow’s analysis relatively simple. The market will likely move in the direction of how they open after today’s Doji, the simple Doji rule. The distance away from the T line is also an alert there may be a better possibility of at least a profit-taking pullback in the markets. Numerous stock charts have indicated potential reversal signals, implying it is time to be prepared to take profits. Being able to identify what the overall market sentiment is revealing allows the candlestick investor to be more prepared for watching for a change of market direction/closing long positions. If the premarket futures show a lower open in Friday’s trading, anticipate the potential pullback to the T line. A positive open would imply bullish sentiment testing the recent highs.

The visual aspects of candlestick charts make it much easier to identify when profit-taking/selling is about to occur in price trends when sell signals are occurring at obvious resistance levels. WB is an example of a sell signal occurring when the price moved up to the level where it filled a previous gap. Witnessing potential reversal signals, at levels that everybody else is watching, gives the candlestick investor much faster evidence that it is time to close out positions. Because candlestick signals provide an immense amount of investor sentiment information, an investor does not need to be a sophisticated technical analyst. They merely need to recognize the signals that are showing a change of investor sentiment that have been highly accurate reversal signals based upon the Japanese Rice traders identifying the strong reversal signals over the past few hundred years. You gain greater precision in identifying price movements knowing the reoccurring aspects of human nature that make candlestick signals very accurate.

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

Good Investing,

The Candlestick Forum Team

Candlestick analysis is not necessarily analyzing each individual signal for a reversal, it is being able to identify the overall investor sentiment of a trend. As demonstrated by the Dow over the past month of trading, there were dramatic swings up and down almost on a daily basis, reaction to whatever the current tweet was. However, simple candlestick trend analysis techniques revealed when there was a change of investor sentiment. A bullish engulfing signal using the 200 day moving average as support once again and a close above the T-line at least provided visual evidence of a possible change of investor sentiment. A gap up the following day indicated the T-line was not going to act as resistance. Early last week, the markets sold off hard again but had one obvious trend factor, the Dow did not close below the T-line. Additionally, a rounding bottom action was taking place, revealing that bullish investor sentiment may be taking control. The next day, with the Dow opening positive, was another indication the T-line was acting as support and further illustrating a rounding bottom. The coup d’état was a gap up out of the sideways trading range and up through the 50 day moving average, revealing a new dynamic in investor sentiment.

Although the bottoming action was hard to identify on an individual signal basis, the accumulation of indicators confirming the Bulls were taking control provided a prospective that allow the candlestick investor to start looking at individual stock charts that might be revealing the same bullish tendencies. This analysis allowed for establishing long positions well before other trading techniques could identify bullish sentiment starting to enter the markets. The visual aspects of candlestick analysis have a tremendous amount of information built into each graphic signal and pattern. It merely takes common sense analysis to start identifying what is occurring between the Bulls and the Bears, allowing for entering long positions well before the rest of the market traders start participating. Numerous long positions established over the past week of trading has made good profits because those positions were established well before everybody else started entering those trades. This is not do to any great stock picking talent, it is merely identifying what investor sentiment is doing.

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

Good Investing,

The Candlestick Forum Team

The markets were illustrating a build up of bullish investor sentiment over the past few trading days. Today’s bullish trading had a different dynamic. Investor sentiment could be seen building up based upon a frypan bottom pattern progressing as well as the trading continued to stay above the T-line. This created the prospects that investor sentiment is starting to turn bullish. The remaining confirmation was the trading out of the trading range that had developed over the past 30 days. The benefit created by this analysis was having bullish stock positions as well as option positions in place with the prospects that an uptrend might be in progress. As demonstrated, existing long positions benefited greatly to the profitability of the portfolio in today’s trading. All the major indexes gapped up through obvious resistance levels, confirming a frypan bottom pattern build up.

Recognizing the bullish sentiment allowed candlestick investors to have positions in place anticipating more bullish sentiment. That established positions that could take advantage of today’s strong bullish trading. The compelling factor was the evidence that a candlestick chart was producing to have positions already established. Although today’s bullish trading was headline results, today’s positive trading showed a new investment dynamic. Having the ability to recognize bullish signals creating a bullish pattern produces an investment environment for establishing long positions at the appropriate time. This was easily identified with bullish charts in MU, WDC, and NVDA that were establishing strong bullish indications. For the option investor, this allowed for establishing call positions as well as bullish spread positions at the exact appropriate time. This is a major feature of candlestick analysis, allowing for the appropriate analysis at the appropriate times. This weekends comprehensive option strategy training will teach investors how to use the appropriate option strategies with the appropriate candlestick signals and patterns.

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

Good Investing,

The Candlestick Forum Team