Archives for February 2020

The markets traded lower Today on more China virus scare rhetoric. Is this the end of the uptrend? Based upon candlestick analysis, the church reveal a much different perspective as far as Today’s selling. After the Dow was down approximate 375 points it finished down 122 points is this bearish? The candlestick formation was somewhat of a Doji type day. The Dow did close below the T-line but forming an indecisive trading day. Add the analysis of the S&P 500 and the NASDAQ, there indecisive trading day continue to show a close above the T-line. This overall analysis indicates there has not been any major change of investor sentiment. The nature of the current uptrend can be characterized much better based upon the visual aspects of candlestick signals. The uptrend remains in progress as long as the indexes continue to trade above the T-line. The nature of the uptrend is revealing a very choppy movement. That is what makes the T-line a very informative indicator. The probabilities indicate the uptrend is still in progress when the indexes cannot close below the T-line. This allows the candlestick investor to have a much more precise analysis of the overall trend and does not allow themselves to be whipsawed in and out of positions.

Patterns provide relevant trend analysis confirmation. The T-line is also very applicable to analyzing what is occurring in a candlestick price pattern. Note that numerous fry pan bottom patterns have remained in an uptrend in spite of what the overall market movement is portraying. This factor can be easily explained. A fry pan bottom is a buildup of investor sentiment over a period of time. It will not be readily influenced by other factors such as the oscillation movements of the overall markets. Knowing this, I candlestick investor can be much more comfortable maintaining fry pan bottom positions no matter what direction the market is going. As long as the uptrend remains above the T-line, even on scary pullback days, the T-line shows the fry pan bottom trajectory is still in progress. The common sense analysis that can be incorporated into candlestick signals and patterns allow an investor to much more clearly understand what is going on in investor sentiment versus being emotionally whipsawed when prices oscillate but do not breach the probabilities of candlestick trend indicators. This is what dramatically reduces emotional decision-making when it comes to investing.

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Good Investing,

The Candlestick Forum Team

Although the Dow was down 165 points today, simple candlestick analysis reveals there was not any major change of investor sentiment. Visually evaluating the NASDAQ shows that although it basically closed flat on the day, it was after it had opened lower, revealing bullish sentiment after it opened. The S&P 500 close lower but after a Doji formation, showing indecisive selling, as well as the T line continue to act as a support level. Taking all three of the indexes into account, the overall evaluation indicates there is no major change of investor sentiment. Additionally, numerous stocks traded positive on the day. The big-name stocks such as AMZN, TSLA, NFLX , BYND, traded positive, once again indicating there was no selling consensus in the overall market trend.

Candlestick patterns continue to show good profitability even in the throes of a indecisive up trending market. The fry pan bottom has produced consistent profitability in a number of our current recommendations, RAD, ITCI , REGI and ZS. ZS produced a very recognizable breakout, a Doji sandwich breaking out through the 200 day moving average, confirming the fry pan bottom breakout.SPCE produced parabolic profits, the same pattern illustrated in TSLA two weeks ago. Knowing what to expect from a pattern puts investors in the correct trades at the correct time. Knowing what investor sentiment does on a repeated basis allows the candlestick investor to take profits at the optimal points, as illustrated in SPCE today. Being mentally prepared for what human nature produces as price patterns, the candlestick investor gains huge advantages of knowing exactly when to be buying and when to be selling with a high degree of probability. This dramatically reduces emotional decision-making when it comes to investment decisions.

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Good Investing,

The Candlestick Forum Team

The nature of a market trend is easier identified by the graphics of candlestick formations. The overall market trend for the past few months has produced a relatively solid uptrend. This is evident by witnessing a steady uptrend followed by a profit-taking pullback, then continuing the uptrend. This type of market move demonstrates the lack of exuberance with profit-taking occurring during the trend as well as on an intraday basis. Obviously this makes short term/daytrading relatively difficult. In these market conditions, holding a trending position for a slightly longer term becomes the best strategy. The ultimate criteria is the T line! As long as the overall market trend continues to close above the T line, the probabilities remain extremely strong the uptrend remains in progress.

The visual analysis of individual stock price movements allow candlestick investors to analyze each individual stock position based upon buy signals and sell signals. Profitable positions that starts showing indications of sell signals can easily be identified for taking profits, then moving funds to new stock/sectors that are starting their uptrend. The J Hook pattern has been working profitably in numerous stock positions over the past few weeks. Witnessing high probability reversals based upon candlestick signals always produce high probability/high profit trades, providing in investor with more supply of good profit potential than most investors will be able to utilize at any one time. This creates a trading strategy that allows for cultivating a portfolio, moving investment funds from profitable trades that are starting to lose steam over to new bullish or bearish positions that have greater probabilities of producing strong profits. This money management technique constantly puts investment funds into the best trade potentials.

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

Good Investing,

The Candlestick Forum Team

Analyzing the overall market trend becomes much more accurate utilizing the combination of candlestick signals and the T-line. Profit-taking became much more probable after the Dow hit another all-time high on Thursday. Profit-taking was not anticipated because the markets hit all-time highs. Profit-taking was anticipated based upon witnessing a potential candlestick signal, a hanging man/dragonfly Doji in Thursday’s trading. The potential reversal signal had additional indication profit-taking was likely to occur. After the Dow had moved up over 1000 points in four days of trading, the trading had moved the Dow well away from the T-line. This made the anticipation of Friday’s trading very simple. The Doji rule indicates prices will move in the direction of how prices open after a Doji. The bearish candle formed on Friday indicated the probabilities of the Dow eventually testing the T-line to see if it was going to continue as support. As illustrated in today’s trading, the Dow basically opened at the T-line and moved positive. The bullish sentiment of the markets were also illustrated in the positive trading above the T-line in both the NASDAQ and S&P 500. The market trend analysis remain simple, as long as the indexes continue to trade above the T-line, the uptrend remains in progress.

Profit-taking during an uptrend makes the trend much more solid. It indicates the lack of exuberance in the markets. Having the ability to project continued strength in the market due to the lack of exuberance allows candlestick investors to take advantage of the high profit pattern breakouts. Numerous fry pan bottom patterns have produced consistent profits during this uptrend. More importantly, the profits created from candlestick patterns are usually much more excessive than mere up trending price moves during an uptrend.

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

Good Investing,

The Candlestick Forum Team