and The Candlestick Forum
The bullish flutter kicker’s in yesterday’s trading brought the indexes up through resistance levels. The strength of the kicker signal/flutter kicker signal indicates a very strong reversal. Today’s positive trading in the markets was expected based upon the flutter kicker signals. However, there was also the warning that any negative tweet’s about China trade talks could still be a strong factor but so far so good.
Today’s positive trading was well anticipated. The setup for a bullish flutter kicker was established in Wednesdays trading. The bullish flutter kicker signal is one of your strongest candlestick reversal signals. It is created when the trading gaps up to the top of the previous day’s open, which had been a bearish candle, and forms a Doji. The gap up itself was a sign of a potential reversal. Once the Doji was formed, a bullish flutter kicker signal is easily recognized as well as anticipated. The Doji rule – prices will usually move in the direction of how they open after a Doji, makes entering profitable trades an immediate process. The bullish flutter kicker signal as anticipated as soon as there is a positive open after the Doji. Knowing this signal is being created allows for establishing profitable positions upon the open.
Anticipating the market indexes are going to trade positive allows a candlestick investor to immediately establish bullish positions in individual stock charts that are also creating bullish flutter kicker signals. NVDA and AAPL had bullish flutter kicker set ups. This is where the 2+2 analysis greatly improves the probabilities of being in a profitable trade. A bullish flutter kicker signal in NVDA provided clear evidence the frypan bottom pattern was going to stay above the T-line, implying more upside.AAPL produce the same scenario, a frypan bottom pattern that would be confirmed with a positive open after yesterday’s Doji, illustrating a breakout of the observable resistance level. Candlestick charts allow for the analysis of a build up of investor sentiment, creating a candlestick pattern. Identifying a strong bullish candlestick signal at a breakout level dramatically improves being in the appropriate trade at the appropriate time. This is merely taking advantage of the consistent patterns that are created by human nature time after time.
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The Candlestick Forum Team
Yesterday the market indexes gapped up at the previous day’s open of bearish candles. At the end of the day, the indexes closed where they opened, creating a Doji. This was a high probability set up for producing a bullish flutter kicker signal based upon positive trading today. As witnessed, today is trading bullish creating the bullish flutter kicker signal. This is one of your strongest reversal signals, provided the indexes close near the top end of their trading range. Not only would that create a strong reversal, but it would also have the indexes closing above the >T-line.
Yesterday’s trading, a Doji day and with the Dow failing to close above the T-line, indicated investor sentiment was indecisive, still subject to being influenced by the most current news item or tweet. Did that project Today’s strong selling? No, but it did indicate that investor sentiment could still be reactive to any news or tweet related information, as it had been in the recent past. Other than holding short positions that have remained below the T-line, establishing new positions, especially longs, is still very difficult.
The indecisive trading of today was not unexpected after the strong reversal of last week. The profit-taking, creating the indecisive Doji day Today was occurring at technical levels that were be in watched by all investors, the 50 day moving average. The Dow closed right on the 50 day moving average while the NASDAQ after trading higher started resisting and selling off at the 50 day moving average. The T-line remains a relevant indicator. The positive trading of last week improved bullish investor sentiment after the indexes bounced up with candlestick reversal signals at support levels such as the 200 day moving average. There is a trend channel being created in the indexes, implying a sideways motion in the markets. However, with support being shown at the low end of the trend channel, investor sentiment although moving from aggressively negative, is not dramatically bullish either. Because of where bullish and bearish signals have occurred over the past few months, it is much easier to graphically evaluate the lack of any major trend in the current market. Fortunately, the simplicity of candlestick scanning techniques allow for identifying the strongest bullish charts as well as bearish charts. These market conditions allow the candlestick investor to be making money by having both bullish and bearish positions in the portfolio.
The number of bullish chart setups has grown over the past few days of trading. This not only indicates a build up of investor confidence, it allows the candlestick investor to pinpoint the strongest potential trades. Currently, numerous frypan bottom patterns, cradle patterns, and McMuffin patterns are being formed. These strong bullish patterns allows for executing high probability profit trades even though the overall market trend remains in a sideways mode. The expectation of results from candlestick patterns dramatically improves the probabilities of being in a profitable trade as well as highly profitable trades. A McMuffin pattern,as demonstrated in our recommendation of TLRA, was based upon the expected results of that pattern set up. Simple candlestick analysis allows investors to identify which trades produce the highest probability results.
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Good Investing,
The Candlestick Forum Team
The low unemployment figure gave a bounce to the indexes. The NASDAQ has already bounced up and resistance at the T-line. The gap up reveals that investor sentiment is ready to be bullish on any good news. Today’s indexes need to stay above their open prices. Trading below that level would indicate the initial bullish sentiment is still not fully confirmed. Numerous short positions should have been closed out upon witnessing bullish reversal signals over the past couple of trading days. Long positions, if added, still require confirmation. The indexes need to trade with strength, near the high end of the trading range Today, to confirm bullish sentiment is activating.
Candlestick charts reveal much more clearly what is occurring at technical levels, such as the support level at the 200 day moving average, whether there has been a true reversal once that level was it or whether it was merely a bounce. The fact that the indexes created bullish hammer signals today after touching the 200 day moving average area provided significant information. The hammer signal, one of the 12 major candlestick signals, was a good indication the Bulls started stepping in today. Even more refined was the fact that the 200 day moving average was the obvious level that might act as support, with that assumption, when prices reached those levels, moving to the 10 minute chart revealed more immediately what was occurring in investor sentiment at that support level. Witnessing a candlestick reversal signal at that level on the 10 minute chart allows the candlestick investor to close short positions and add long positions to the portfolio at the exact appropriate trading levels. The 10 minute chart works very effectively in conjunction with the daily chart when prices/trends start moving dramatically into the overbought or oversold conditions.
Numerous bullish reversal signals were created in charts such as NVDA and ROKU. The recognition of those signals pinpoint which trades are going to be most effective based upon the strong candlestick reversal signals. Just because the market had a major reversal today does not necessarily mean all stocks showed strong prospects of an uptrend. AAPL, AMZN, NFLX created charts that showed the selling may have stopped but not any indication any strong buying had occurred. Understanding which candlestick signals provide the strongest reversal patterns allows investors to be in the appropriate trades that are going to produce the best profitability. A positive open tomorrow would create a high probability bounce at least back up to the 50 day moving average/T-line area. The best profitable trading technique is executing the trades in the strongest candlestick charts. This is what constantly allows for the cultivation of being in the best trades at the appropriate times.
Chat session tonight at 8 PM ET. Click here to register.
Good Investing,
The Candlestick Forum Team
The lower numbers on the service sector index Today to the indexes right down to the suspected target of the 200 day moving average. Now that they are there, the 10 minute chart becomes more relevant to see if the 200 day moving average area is the place where the buying starts. This may not necessarily indicate a reversal to the upside is starting, merely showing where short covering may be occurring as well as buyers starting to add the bullish positions. Watch to see what type of signal may be created in the indexes Today. Consider taking profits on short positions, at least closing out partial positions.
October 14th Daily Market Comments