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Stock Chat – Thursday 10/29/20
Archives for October 2020
October 29th Market Wrap-Up
October 29, 2020
Based upon candlestick analysis, although the market indexes traded positive during the day, they may not have produced any reversals. This involves having all the indicators in alignment. The stochastics are still just heading down into the oversold condition. This would imply some more selling possibilities. The NASDAQ and the S&P 500 did formed bullish Harami’s, which will now require bullish confirmation on the opens tomorrow. The Dow did not form any major reversal signal, a good indication that the bottom may not be in yet. However, today was an indication that buying was starting at these levels. Any positions in the portfolio can be maintained by using the T-line as the final factor, long positions need to stay above the T-line, short positions need to stay below the T-line.
There are some J-hook patterns working well in this possible bottoming action. Auto manufacturers are showing strength as seen in NIO and LI. Any establishing of new long positions should have very compelling by signals or patterns. Short positions can be maintained as long as there is not evidence of bullish signals and a close above the T line. Overall, these market conditions warrant being less aggressive for establishing new positions until the markets show a definite direction. This would make staying in cash a good strategy, having dry powder ready for the next market/sector moves.
Chat session tonight at 8 PM ET with Guest Speaker Kirt Christensen. Click here to register.
Good investing,
The Candlestick Forum team.
October 29th Daily Market Comments
October 29, 2020
Today’s positive trading in the indexes are creating bullish Harami’s, indicating the selling may have stopped. However, stochastics are just now heading into the oversold area and the day is not over yet. It will be important to see where the market indexes close today. The Dow is currently trading at the low of last month, providing the possibility of another bottom at this level. Stay predominately short but be attentive.
October 27th Daily Market Comments
October 27, 2020
The analysis remains the same, as long as the indexes are trading below the T-line the downtrend remains in progress. Continue to hold short positions and stopping out of any long positions that are showing weakness, trading below the T line. Uncertainty is what creates bearish investor sentiment. No stimulus package being discussed, inconsistency in the election polls, the virus gaining strength. This all provides an indecisive market environment.
October 26th Market Direction
October 26, 2020
Simple candlestick trading rules allow investors to dramatically improve the probabilities of being in the right direction at the right time. The T line rule, assumes that investor sentiment has gotten negative/bearish if a trend/price is trading below the T line, especially after a candlestick sell signal. This is been demonstrated when the indexes close below the T line last week. If you understand that a close below the T line is an indication that investor sentiment has turned bearish, it makes the probabilities that any negative news is likely to add to the downside with much more energy. There will be a small number of positions acting bullish in a down trending market, but why go against the probabilities. As soon as the major indexes show a sell signal and a close below the T line, the immediate trading strategy should be closing long positions that are not showing strength and adding short positions to the portfolio.
Numerous positions could be identified today in the selling of the market after sell signals. A bearish kicker signal in NLCH revealed the strong selling pressure in the cruise line stocks. A number of stocks such as KRA had shown indecisive trading, a series of Doji’s, in the overbought area and traded much lower today below the T line. These are chart set ups showing a dramatic change of investor sentiment allowing the candlestick investor to go after short positions that have high degree of probabilities of heading down further. This market is likely to trade indecisively going into the election. Investors do not like uncertainty! Candlestick investors can identify what investor sentiment is doing based upon the confidence or the lack of confidence of anticipated outcomes. Until an outcome can be verified, the slow drifting downtrend of the markets will remain in progress.
Chat session tonight at 8 PM ET.
Good investing,
The Candlestick Forum team.
October 26th Daily Market Comments
October 26, 2020
The trend analysis remains the same, the indexes demonstrating indecisive trading each day and the T-line continuing to act as a resistance factor. There is still plenty of indecision, the virus expanding, the election results. The slow downward drift of the market continues to produce a trading environment that can have both long and short positions in the portfolio, but each direction requires full confirmation that each stock price trend is not showing reversals, candlestick signals. Heavier cash positions is prudent.
Weekly Watch List October 26th – October 30th
October 25, 2020
The indecisive market trend is obvious. First, the direction of the trading has been sideways for the last week of trading. Secondly, the nature of each trading day, forming indecisive hammer type signals in the Dow, also illustrates a lack of decisiveness. The lack of any market direction can probably be attributed to waiting to see what the election outcome will be. Fortunately, the candlestick investor has the benefit of being able to do simple scans to find which sectors/stocks are performing the strongest. This week, there are strong signals in the biotech/healthcare sector. RVP, NXTC, NXGN, NK, CRDF, ADNT. The business software sector has shown some good J-hook pattern setups.VERI, ECOM, MDLA, VIPS. The apparel store retail stocks are showing good strength. DLTH, PLCE, ANF, DDS. The sideways mode of the market is likely to stay in effect until there is a dramatic change of the polls for the election. The results of the polls apparently are not producing any insights due to the closeness of the races as well as the lack of confidence in the accuracy of polling. These market conditions make the results of simple candlestick scanning techniques much more relevant for identifying profitable trades.
10/22/2020 Stock Chat with Stephen Bigalow
October 22, 2020
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Stock Chat – Thursday 10/22/20
At the end of the webinar, Steve announced his membership offers.
October 22nd Market Wrap-Up
October 22, 2020
Let the market tell you what the market is doing! This is the advice from the Japanese rice traders. When the indexes showed strong sell signals on Monday and closed below the T line, the probabilities of the market trend change dramatically. A close below the T line produces strong probabilities the downtrend is now in progress. The downtrend will remain in progress until witnessing a candlestick buy signal and a close back up above the T-line. Today’s trading illustrated continued indecisiveness. The Dow bounced off the 50-day moving average but then closed at the T line. The NASDAQ continues to trade below the T-line. This puts the market trend still in an indecisive nature. These are market conditions that warrant having both long and short positions in the portfolio. Long positions can be maintained as long as there is not a candlestick sell signal and a close below the T line. Short positions can be maintained as long as there are not bullish candlestick signals and a close above the T-line.
Candlestick investors have a major advantage. Very simple scanning techniques will allow for immediately pinpointing which chart patterns are producing the strongest bullish strength and the strongest bearish strength. Even when there is not a definitive direction of the overall market, the simple scanning techniques will always find good strong buy positions and good short positions. Currently, there are numerous J-hook patterns in progress, the insurance stocks are showing strong J-hook patterns. AXL is illustrating a bobble breakout, which is a very high probability trades set up.TUP has formed a MorningStar signal right on the 50-day moving average, clearly indicating this is where the buyers were stepping back in. The analysis of candlestick charts allows for extremely high probability trades.
Chat session tonight at 8 PM ET with Stephen Bigalow. Click here to register.
Good investing,
The Candlestick Forum team.
October 30th Daily Market Comments
If you are like me, before candlesticks came along, I wanted to start buying or covering short positions on the first signs of buying when the markets were well in the oversold area. However, the combination of signals and confirming indicators, such as stochastics, allowed me to sit more patiently waiting for everything to align. Yesterday’s buying, in the oversold area, didn’t have the full confirmation of the markets being well into the oversold area. Remaining short or not buying was based upon the simple T line rule, until there is a buy signal and a close above the T line, anticipate a downtrend remains in progress.