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The most powerful candlestick patterns provide a very accurate market analysis. The J-hook pattern is one of the most powerful candlestick patterns, providing a high probability trend direction as well as an excessive profit move. The J-hook pattern has a very simple measuring element. Wave one is usually going to produce the same magnitude move in wave three. Currently the market indexes have remained in uptrends after the Fed announcements, raising interest rates. The T line provided additional confirmation the J-hook pattern was in progress. Additionally, if wave three reaches the same magnitude as wave one in the NASDAQ, it will have breached the recent high of the downtrend for the first time in the past six months. This provides good evidence that the downtrend may be over. However, the breach of that recent high of a few weeks ago needs to be confirmed. Otherwise the downtrend remains in progress. When the market indexes are producing J-hook patterns, individual stock prices will also reveal the same patterns. Take advantage of the information built into these candlestick signals and patterns that have produced high probability results for centuries. Human nature works the same way time after time.
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Good Investing,
Stephen Bigalow
Assumption – candlestick signals and patterns reveal price direction with a high degree of probability based upon historic results. They are further enhanced with confirming indicators, such as the T line. This means if the charts are revealing price movement that cannot be clearly analyzed as far as whether the bulls or the bears are in control, that becomes the analysis. The evaluation should be there is no identifiable price movements that are showing consistency, relax and sit in cash until there becomes better visual analysis. There were good strong sell signals over the past few days in the market indexes. However, today’s positive trading put so sell signals in doubt. That all adds up to the market does not have a decisive direction yet.
Assumption – candlestick signals and patterns reveal price direction with a high degree of probability based upon historic results. They are further enhanced with confirming indicators, such as the T line. This means if the charts are revealing price movement that cannot be clearly analyzed as far as whether the bulls or the bears are in control, that becomes the analysis. The evaluation should be there is no identifiable price movements that are showing consistency, relax and sit in cash until there becomes better visual analysis. There were good strong sell signals over the past few days in the market indexes. However, today’s positive trading put so sell signals in doubt. That all adds up to the market does not have a decisive direction yet.
Walmart is putting a negative perspective in investor sentiment today. The consumer confidence index was also showing a downtrend. The NASDAQ has gapped down to the T line and continue to trade lower. Unless there is a major change of investor sentiment by the end of the day, the bears appear to have control of the market. This is also evident in the number of short positions that are performing very well.
Profitable candlestick patterns are based upon one simple factor – human nature. The reason profitable candlestick patterns are identified is because they produce high probability consistent results. With the current market trend remaining relatively indecisive, having both long and short positions in place is a viable strategy. But when the market in general is trading indecisively, the candlestick investor has a great advantage by knowing which candlestick patterns will have greater expectations of producing profits. The J-hook pattern, whether bullish or bearish, allows for an investor to anticipate the next strong price move. Identifying the strong candlestick patterns is enhanced by utilizing individual candlestick signals in the development of that pattern. If you know and understand the investor sentiment built into the 12 major candlestick signals, your analytical ability is greatly improved. The Candlestick Forum chat room has a good number of experienced candlestick traders that provide strong trade set ups as well as providing the learning information that helps new candlestick investors understand why those trades are strong trades. Join us, you will get much more information than you expect.
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Good Investing,
Stephen Bigalow
Do the summer doldrums always occur this time of year? Not always and the candlestick charts will illustrate whether that is happening or not. This year, although the indexes are currently trading above the T line, the market conditions still reveal indecisive trading. This is also accentuated by the lack of direction from the feds. The reactive decision-making about interest rates versus a proactive approach continues to put questioning in the investment community.
A consolidation day. Not unexpected after a good uptrending market during the week. A Friday in the summertime is likely to see some profit-taking/consolidation. Continue to stay predominately long as long as there is not any major change of the current uptrend. It would not be unusual to see the Dow doing some consolidation, allowing the T line to catch up.GGR should not be bought until it comes back up through yesterday’s close. HUSA is a good example of why you wait for pattern confirmation.
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July 28th Daily Market Comments
Be careful! Fed announcements have a high frequency of whipsaw actions where the initial day has a strong move in one direction but then the next day has a strong move back in the opposite direction. Reality sets in. The feds raised interest rates. Expected. Bullish price move. But then rational thinking realizes they are having to raise interest rates to quell inflation. Market trend? Still relatively indecisive. Any positions should have very strong chart patterns.