Archives for March 2020

The reversal in the markets were anticipated as described in the YouTube of Sunday night, market reversal. The set up for a reversal was illustrated by the indicators created by human nature. Friday showed a gap down in the oversold area and the formation of a Doji/hammer signal. More telling was the fact that the potential Doji/hammer reversal signal occurred in an excessive distance away from the T-line. The NASDAQ produced a belt holds/meeting line signal, also well away from the T-line. Knowing the probabilities based upon the overextension of selling allows the candlestick investor to be aggressive. Witnessing a positive open in today’s trading produces the incentive to be buying long positions immediately, positions that were confirming reversal signals. One of the comments in the chat room today was that it is still hard to commit to long positions with such bearish sentiment in the markets. This is exactly why understanding the signals that set up for a major reversal is so beneficial to a candlestick investor. It cuts through the emotional thought process, circumventing the emotions that people have when the markets are selling off. This promotes the probability expectation that a reversal is occurring and not being deterred by the emotional fear factor.

Numerous belt holds signals on Friday in the oversold condition provided the visual set up for aggressively buying bullish confirmation in those stocks on the open today, understanding that a change of investor sentiment had occurred in the formation of those signals. Being mentally prepared for a high probability reversal situation allows the candlestick investor to be much more aggressive. Having the ability to identify what the signals and patterns are actually illustrating, the actual buy and sell decisions of investors, cuts through all the verbal rhetoric of the “experts”and the financial news broadcasters.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.