and The Candlestick Forum
Impeachment! Trade deals! Jobs report! Good, bad? Let the market tell you what the market thanks. After the early selling, the indexes are now trading positive which keeps them up above the T-line. Assume the uptrend is in progress. The biotech’s are acting strong today. Stay predominantly long with safety stop’s in place.
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Stock Chat – Thursday 12/12/19
In this free training, by Michael Guess of DayTradeSafe, he’s going to show you why rules-based mechanical trading systems are so appealing and work so well, because when there is very little room for ambiguity, you can more confidently enter and exit your trades.
Click here to get Michael’s free downloadable guide.
The nature of the overall market trend can sometimes be confusing based upon the day to day trading. Today’s trading formed a bearish Harami, giving the possible indication the buying of Friday had come to an end. Fortunately, for the candlestick investor, the addition of the T-line into the analysis allows for better assessments as to what the overall investor sentiment is doing. The fact that the market indexes continue to trade above the T-line dramatically improves the probabilities the bullish sentiment of the market is back in progress. The combination of candlestick signals and the use of the T-line, the T-line being a natural support and resistance level of human nature, produces a very powerful and accurate evaluation of what a market/price trend will do. The use of the T-line in conjunction with candlestick signals dramatically reduces the prospects of being whipsawed in and out of a position.
A major advantage of candlestick analysis is being able to identify which stocks/sectors are working the strongest or weakest during a market trend. As illustrated in today’s trading, the charts/ETFs related to the biotech sector illustrated money coming into that sector. This allows for pinpointing the strong stocks in that sector. With the supply of over 7800 stock trading entities, candlestick charting techniques allow for identifying very quickly which stocks have the best upside potential. Even when a market trend is in an upward direction, Candlestick investors gain a huge advantages by surpassing merely uptrending stocks during an uptrend but identifying which stocks have the most strongest upside potential. Currently, the assumption is that the market is back in an uptrend now that is trading above the T line. Simple candlestick scanning techniques reveal the biotech sector is gaining inordinate strength. Logic dictates having a few biotech positions in the portfolio.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
Although the Dow is trading slightly lower, the other indexes are trading slightly positive and continuing to trade above the T-line. Today’s trading does not show any major change of investor sentiment in the overall market. This makes each individual chart analysis the important criteria. Be predominantly long but always have safety stop’s in place, i.e. DTIL. The caustic political rhetoric of Washington DC has not put a damper on investor sentiment. This makes the Japanese Rice traders professing of letting the market tell you what the market is doing very poignant as investor sentiment dismisses Washington’s political atmosphere. Stay predominantly long but continue to have safety stop’s in place in case of unexpected news.
The jobs report provided the bullish sentiment returns of the markets illustrated by the indexes gapping up, producing trend kicker signals above the T-line. The basic analysis will be simple, if the markets close above the T-line Today, investor sentiment has turned back positive continuing the uptrend in the market. Obviously, portfolios should now be oriented toward the long side. Any short positions should still have compelling weakness, staying below the T-line.
The indecisive trend of the markets is more clearly revealed because of the trading formations on a daily basis. Adding the factor of the market indexes trading indecisively below the T line provides a better probability trading strategy for investors. Without a definite direction of the market, the portfolio strategy becomes more oriented toward having both long and short positions in the portfolio. This strategy can be maintained until there is a definite trend indication, such as a bullish candlestick signal and a close backup above the T line, showing the bullish uptrend is back in progress. Fortunately, with simple candlestick scanning techniques, it is very easy to identify strong bullish signals and patterns as well as strong bearish signals and patterns. Logic dictates that no matter which direction the market is moving or not moving, candlestick scanning techniques will always find more bullish and bearish trade set ups than most investors will be able to handle. This produces the opportunity for not only finding good trades, but being able to cultivate the best of those good trades.
Very simple trend analysis techniques allows investors to participate in price movements based upon candlestick signals confirming an existing trend. For example, shorting BYND is based upon recognizing the downtrend of this stock price has been in progress for months. Additionally, witnessing candlestick sell signals at obvious resistance levels reveals investor sentiment is still continuing the downtrend. The same is true for analyzing bullish trends. The T line becomes a very important factor for recognizing the signals/patterns that are going to continue an uptrending move.
Chat session tonight at 8 PM ET. Click here to register.
Good Investing,
The Candlestick Forum Team
Although the market indexes are trading positive Today, note that the NASDAQ and the S&P 500 have resisted and sold back off when it hit the T-line. Until the market indexes can show a conclusive close above the T-line, the market direction is still in question.
The markets closing below the T-line yesterday produces an extremely high probability of a change of investor sentiment. Trade talk tweet’s provided more bearish stimulus, any negative news be an amplified because investor sentiment had confirmed below the T-line yesterday. Maintaining long positions require the lack of any sell signals and continuation above the T-line. When the market shows a reversal potential, having both long and short positions in the portfolio is the viable strategy.
Logical trend assessments can be made when witnessing continuity in all the indexes. Today, the Dow, S&P 500, and the NASDAQ all had the same candlestick indications. They each created sell and closed below the T-line. On days when one index is up and another may be down, the common sense analysis is that there has not been any change of investor sentiment, the trend will usually continue. However, on days when all the indexes are moving in the same direction and as seen in today’s trading, closing below the T line, it is much more evident that there has been a general change of investor sentiment across-the-board. The magnitude of the sell signals today also indicated there had been a change of investor sentiment. This does not necessarily indicate a major reversal of the market indexes but at least it shows there is a higher probability of a pullback/consolidation stage setting up in the markets. This analysis allows option traders to make a much more decisive decision-making process when evaluating individual stock positions that might not be showing excessive weakness, but it does indicate the time factor may be about to reduce the time premium in specific positions.
The T line remains a very strong trend indicator. Individual stock positions that may have shown weakness and close below the T line now have the improved prospects of pulling back. They become positions that may be closed. When the market shows weakness and individual stock positions continue to trade above the T line, this becomes a clear indication that those bullish positions are not being affected by the market.
We will conduct a “Members Only” chat session tonight at 8:00 pm EST.
Good Investing,
The Candlestick Forum Team
December 11th Daily Market Comments
Although the Dow is trading relatively flat on the day so far, the NASDAQ and the S&P 500 are trading higher providing more evidence the T-line is going to be acting as a support level for this uptrend. The biotech’s of already been identified as a sector that is acting very bullish, producing many good trades in that area. The patterns are working well as illustrated in the TSLA chart. As long as the market indexes remain above the T-line, the portfolio should be oriented toward the long side. However, are short recommendations continue to be profitable i.e. NLTX, CMD,FOLD. When the market indexes are showing slow movement one way or the other, having both long and short positions in the portfolio is the most prudent strategy.