Archives for December 2019

Today’s selling did not indicate any major change of investor sentiment. The indexes closed at or above the T-line, not reflecting any major change of investor sentiment. This is probably profit-taking and shifting of portfolios before the end of the year. Bullish trending stocks remained an uptrend. The stocks that showed sell signals and closes below the T-line should have been closed out, for two reasons. First, a close below the T-line dramatically improves the probabilities of prices heading lower. Secondly, any stock positions that were showing indecisive trading provided opportunities to convert those positions back to cash. A major advantage of candlestick analysis is recognizing what the big money evaluations were being made as far as anticipating which sectors were being analyzed as the strongest sectors going into the first quarter of the new year. This is easily identified utilizing the stocks signals and patterns that are showing the best strength in specific sectors the first few trading days of the new year. This allows the candlestick investor to immediately produce good profits going into 2020.. Although the markets traded relatively sideways for the past two years, the clearly defined tops and bottoms of interim trends allowed for consistent profitability.

The results of patterns produce not only high probability results but extremely profitable returns. This was illustrated today in our recent recommendation on MAXR, producing a fry pan bottom that broke out today. The major advantage of utilizing candlestick patterns is based upon the expected results of what investor sentiment buildup will produce on a breakout of a specific pattern. LK is also in the process of a fry pan bottom breakout potential. Because investor sentiment reacts the same way time after time, century after century, utilizing the expected results of a pattern puts in investor in high probability trades. The patterns also allow for entering trades right at the optimal time for a breakout to occur. This produces a very simple trading strategy. The expected results of a breakout should produce big profits immediately. The lack of a breakout allows for closing out a trade very quickly and moving on to the next high probability trades set up

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

Good Investing,

The Candlestick Forum Team

Although the volume at holiday time is usually much lower than normal, the underlying factor of the existing volume is that it will still show what investor sentiment is revealing from investors that are participating in the slow volume markets. Currently, it is evident that there is not any change of investor sentiment, slow bullish buying continues the uptrend. Obviously the week of the holiday will not have the full gamut of investors. The candlestick investor can dramatically improve profitability by accurately evaluating what the overall market trend is going to do. We saw the breakout into new territory after consolidation for the last two years. This would imply wave three was in progress. The continuation of wave three can be refined by using the T line. The whole aspect of candlestick analysis is merely common sense applications of what investor sentiment has done over and over in the past. The signals, the patterns, the T line, and the other major moving averages provide a trading platform that results in extremely high probability/high profit trades.

This is usually a good week to not do anything aggressive, maintain positions that have not shown reversals and most importantly assess your results of this past year. What did you do correctly, what seem to be the most comfortable type of trading for you, what did you do that consistently produced negative results for your trading? Analyze which candlestick signals and patterns that were the most profitable results for you this past year. Trading is like any other activity. You have to constantly evaluate what you are doing right and what you have been doing wrong. Candlestick signals and patterns produce high probability results. That is why they are still in effect today. Human nature works the same way time after time. Successful investing is utilizing information that will be applied to trades that have high probability results. When you learn to identify the patterns and understand why those patterns are created, you gain control of your own investment future.
got it

There will be no Chat session tonight.

Good Investing,

The Candlestick Forum Team

Although holiday weeks usually see trading with much lower volume, the candlestick charts are still relevant for demonstrating investor sentiment of the trading that is being executed. Today’s positive trading continues to illustrate bullish sentiment is in control. This becomes much more clearly illustrated based upon the uptrend remaining above the T line. Currently there is no signs of exuberance in in the market trend. The overall trend analysis illustrates a wave three coming out of the sideways consolidation stage of the markets over the past few months. Wave three should have an up trending bias going into the end of the year based upon the magnitude of wave one prior to the consolidation. Investor sentiment will usually continue in existing trend until there is a definite candlestick reversal signal or exuberance starts coming into the market. The exuberance illustrates everybody is confident that the markets are going higher. That becomes the time to watch for the smart money starting to take profits.

The current study uptrend of the market continues to produce high profit candlestick breakout trades. When the market is in a steady uptrend, the bigger profit trades will result from candlestick pattern breakouts. The fry pan bottom pattern and the J hook patterns continue
to produce high probability trades. Fry pan bottom patterns at breakout levels such as a major moving average as illustrated in the TWTR chart produces a high probability result as well as a high profit result. The buildup of investor sentiment, the pattern, allows the candlestick investor to be prepared to buy at the ultimate entry point with a high degree of expected results. The utilization of candlestick signals, which is the graphic depiction of human nature, has been demonstrated over hundreds of years as being the most reliable indication of price movements.

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

Good Investing,

The Candlestick Forum Team

Impeachment! Political squabbling! What does this do to the markets? With candlestick analysis, you do not have to be concerned. Candlestick signals and patterns are the direct result of investor sentiment decisions. They are the actual results of investors buying and selling decisions. Candlestick charts cut through all the rhetoric and concentrates on what investors are actually doing, whether buying or selling. The wave pattern of the markets is much more clearly evident when using candlestick formations. After two months of consolidation, the Dow is now currently in the next wave to the upside. How long can this move be anticipated. A logical measurement can be based upon the up move that started in early October. Does this mean the next wave will be the same magnitude? That is a viable expectation but what is the most important indicators to show when an up trend has come to an end? A candlestick sell signal and a close below the T-line. Until that combination occurs, investors can be aggressive and confident that up trending candlestick price patterns will still produce inordinate profits.

There are numerous signals and patterns that amplify the profitability as well as the probability of being incorrect trades at the correct time. The results of these pattern breakouts produce much greater profitability than merely up trending stocks during an up trend. Witnessing the results of price patterns, especially in the new big-name stocks such as TSLA, NVDA, and NFLX not only produces strong profit trades but it adds additional credibility to the fact that the bullish sentiment of the markets are still in progress. Candlestick charts are merely the common sense reoccurring investment decision-making put into graphic depictions. Candlestick charts allow for the exact timing of getting in strong price moves.

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

Good Investing,

The Candlestick Forum Team