Not a decisive trading day and with the indexes trading at or below the T line. The markets appear to be in a wait and see mode. This makes each individual stock chart the main criteria today.
Archives for November 2022
November 28th Marker Direction
November 28, 2022
A reversal in the market indexes become much more easier to identify when using the Doji candlestick signal. The Doji candlestick signal is the most recognized signal. It illustrates indecision between the bulls and the bears. Today’s selling was identified when the Dow was trading back below the open of Friday. This is more relevant when the indexes are in the overbought condition. Additional confirmation was a gap down from Doji’s of Friday in both the NASDAQ and the S&P 500. That creates a bearish best friend signal, one of your strongest trend indicators. The additional bearish confirmation was the closures below the T line. The Doji candlestick signal can identify which individual stock positions are going to show the strongest potential down moves. Simple logic – if you can analyze the overall direction of the market based upon candlestick signals, you can identify which down trending stocks are going to have the strongest bearish potential using candlestick signals.
November 28th Daily Market Comments
November 28, 2022
Weakness in the market trend is being demonstrated with the NASDAQ currently trading back below the T-line, forming a sideways wedge. The Dow is trading below Friday’s open, improving the probabilities of a pullback at least to the T-line. Positions that look iffy should be analyzed as to whether they are the best places to have your money. Take some off the table.
November 22nd Daily Market Comments
November 22, 2022
The Dow is showing the strongest bullish chart. It has clearly revealed the T line is acting as a support level and setting up for a J-hook pattern, provided it closes near the high end of the trading range today. If it sells off hard, creating an ShootingStar signal, failing at the highs of last week, it would be indicating a double top. The S&P 500 and the transportation index are supporting above the T line. The NASDAQ continues to show the most weakness.
November 21st Market Direction
November 21, 2022
There is always questions about the difference between candlestick analysis and price action trading. The answer is simple! Candlestick analysis is the ultimate price action trading strategy. Candlestick signals and patterns are the identification of price action. The candlestick signals are based upon human nature producing price actions that show a change of investor sentiment. Candlestick analysis enhances the ability to see a change of investor sentiment occurring and utilizing other indicators that would add credence to why and where a trend reversal was likely happening. A candlestick buy signal at technical levels everybody else is watching, such as moving averages, trend lines, Bollinger bands, Fibonacci numbers etc., improves the probabilities that a reversal is occurring. Adding the T line to the chart analysis dramatically improves the probabilities of a trend reversal and a trend continuation based upon the premise that the T line acts like a natural support and resistance level of human nature. The market indexes are currently illustrating indecision, based upon the nature of candlestick signals i.e. hanging man, shooting stars, Doji’s, spinning tops. When this type of price action occurs in the overbought or oversold condition, the Japanese rice traders have observed that this is usually where a change of investor sentiment is occurring. Candlestick analysis is the ultimate price action trading strategy. It defines what is occurring in investor sentiment based upon what prices are doing.
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November 21st Daily Market Comments
November 21, 2022
The lack of decisive direction in the market indexes continue to make having both long and short positions in the portfolio. However, there appears to be more strength in the bearish patterns. Numerous bearish J-hook patterns are being confirmed by the T line. The NASDAQ is showing the greatest bearish indications.
Weekly Watchlist November 21st – November 25th
November 20, 2022
A Santa Claus rally? That is the anticipation every year going into the holidays. The Santa Claus rally is usually expected because of the high percentage of the time in the past it has occurred. What does that mean for the candlestick investor? Candlestick charts will provide much more clarity as to whether a Santa Claus rally is likely to occur, and then confirm whether the rally is or is not occurring. This is based upon simple visual analysis. Our the market indexes showing bullish confirmation, trading above the T line? There are numerous adages as far as market trends. Such as “sell in May and go away”, or expectations produced by seasonality results, price movements that usually occur at the same times year after year. The candlestick investor has a huge advantage because of the actual visual results built into candlestick charts. Currently, the Dow is demonstrating an uptrending bias based upon the bobble breakout pattern at the 200 day moving average, followed by the T line producing confirmation the uptrend is in progress. However, the NASDAQ is not showing the same bullish resiliency. Although the NASDAQ is trading above the T line, the candlestick formations reveal a different story as far as investor sentiment. The trajectory is flat and the dark candles reveal selling pressure versus bullish sentiment. This creates a much better trade evaluation for specific stock/sectors. There are some sectors moving positive while other sectors are showing bearish bias. These market conditions allow an investor to have both long and short positions on at the same time. Fortunately, simple scanning techniques allow for identifying which sectors have the prospects of trading bullish while also identifying which sectors have strong bearish trends. This then allows for identifying which stocks in those sectors have the prospects of producing the strongest bullish or bearish price moves. Join us Tuesday night for the Candlestick Forum chat session demonstrating how to identify the strongest potential bullish sectors and the strongest bearish sectors going into the holiday season.
November 18th Daily Market Comments
November 18, 2022
The market indexes continue to show a sideways mode. This continues to make having both long and short positions viable. Note how a number of stocks in a downtrend opened positive, right at the T-line, and then started trading lower. This provides significant information. Short positions working well seem to be more numerous.
November 30th Daily Market Comments
The T line rule is still in effect. As long as the indexes are trading below the T line, assume investor bias is bearish. Today’s expected Fed comments apparently not appearing to be any great influence. Both long and short positions are working with the bias toward the downside.