Archives for November 2020

Warning, warning, Will Robinson! Today’s large gap up held up most of the day but saw selling going into the final hour. This created a Shooting star type signal in the Dow after it had exceeded the all-time high in the market. This may be the classic buy on rumor, sell on news. At these levels and witnessing indecision/sell signals in the Dow, the NASDAQ, the S&P 500, and the transportation index, be ready to take profits. Any long positions that have shown weakness, candlestick sell signals, be ready to close out and start shifting to short positions. There remains a lot of unknowns in the political theater. These market conditions warrant adding short positions to the portfolio, maintaining any long positions that have not shown sell signals, and maintaining a heavier cash position. This means any trades being established should have very compelling buy signals or sell signals.

There are some very strong sell signals, OSTK and LRN had bearish best friend signals formed today. These positions can be shorted on a week market open tomorrow. Investor sentiment may be in a whipsaw mode if investors are watching the Senate race. As a candlestick investor, you may not know the outcomes of specific events that will affect the market, but the visual aspects of candlestick charts allow you to analyze what everybody else is thinking based upon possible future events. A good example is witnessing the airlines stocks opening much higher but closing at the low end of there trading ranges. This produces valuable information as far as continued strength or the lack of continued strength in the sector. On the other hand, the cruise lines open positive, closed positive but indecisively positive. Knowing what to expect after those type of graphics allows for much more accurate assessment of which way the sectors/stocks are likely to move.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.

Should you be buying this market now? This is a question you do not have to ask when using candlestick analysis. The buy signals occurred on Monday of this week, after witnessing candlestick reversal signals bouncing up off major support levels. Why do most people ask whether to be buying now? That is normal human nature! They want to be convinced the buying is real. But that is usually getting to the areas where the smart investors are thinking about taking profits. When you are confident that candlestick signals reveal what is occurring in human nature, you can take advantage of buying at levels that most investors are still hesitant to be buying. This puts you in positions where you are buying with the smart money. Instead of thinking about whether you should be buying at these levels, the candlestick investor entering trades at the first signs of reversals in investor sentiment is now ready to take profits when the normal investor is thinking about buying.

There have been huge profits created from strong reversal signals that formed just this week. Simple scanning techniques revealed the electric vehicle sector was showing new strength. A major advantage of being a candlestick investor is recognizing when it is time to take profits in one sector and start rolling into sectors that are just starting an uptrend. Taking profits in specific sectors that are currently trading up strong will free up capital to go into new sectors that are showing new strength, such as gold stocks just starting a new uptrend. The visual aspects of candlestick signals allow an investor to evaluate when it is time to get in to a trade and when to get out. This allows for placing funds in stock/sectors that have a high probability of producing good profits, taking profits, and rolling into new high probability trades set ups. The strength of new stocks/sectors are clearly illustrated using candlestick signals followed by gaps. Join us tonight for analyzing how to use gaps with candlestick signals to produce big profits.

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

Good investing,

The Candlestick Forum team.