June 20th Market Wrap-Up

Chat session tonight at 8 PM ET with Guest speaker Dave Aquino. Click here to register.

Good Investing,

The Candlestick Forum Team

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June 17th Market Direction

The graphics of candlestick charts reveal what everybody is watching. The 50 day moving average has acted as a support level once the Dow and S&P 500 broke up through that level. Although the candlestick formations are not revealing a tremendous amount of strength in the current uptrend, they do reveal the lack of any selling pressure. This implies bullish sentiment remains in control. This type of market environment allows for identifying the candlestick signals or patterns that are going to continue to perform with inordinate profits because of the lack of concern of the market selling off. Simply stated, strong candlestick patterns will continue to perform with exorbitant profits when the overall market trend is not showing any change.

The J-hook patterns are obvious profitable set ups due to the market in general creating the potential of J-hook patterns. Specific sectors, such as gold, is producing numerous bullish patterns because gold itself is acting strong. Finding the strongest bullish stock charts can be narrowed down by merely identifying which sector ETFs are producing the strongest signals. Today,LABU formed a kicker signal, breaking the price out of a basing area. This makes the biotech’s strong bullish prospects. Candlestick scans are greatly simplified by merely identifying the sectors that have the biggest upside potential. Then finding the stocks that have the best bullish charts puts all the probabilities in investor’s favor, putting all the stars in alignment.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

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June 13th Market Wrap-Up

The graphics of candlestick’s make it much more clear to analyze whether a market is in a profit-taking/consolidation stage versus a full-scale reversal. After a strong bullish move last week, the Dow and the S&P 500 produced a gap up shooting star/Doji. This indicated the possibility of a reversal. Tuesday’s trading produced bearish confirmation. The Dow formed a bearish engulfing signal after the shooting star/Doji. But the graphics of candlestick analysis allow for a much more accurate assessment of whether this was merely profit-taking versus a full-scale reversal. Witnessing the type of trading that occurred as the Dow pulled back to the 50 day moving average made it much more evident that there was the lack of selling pressure. The 50 day moving average acted as a support level as the Dow traded in decisively at that level, a Doji day. Today’s positive trading was more evidence the 50 day moving average was going to act as a support level and produced the probability of a bullish J-hook pattern starting the next uptrend. Profit-taking was more evident in the indexes because the transportation index continue to trade higher. This illustrated there was not a mass selling consensus in the markets.

Knowing that the markets were not reversing after a good uptrend last week allows for participating in the high profit candlestick signals and patterns. The frypan bottom was still very evident in XON, illustrating a breakout of that pattern with a gap up. Simple scanning techniques allows the candlestick investor to pinpoint which sectors are probably going to act the best. As J-hook patterns are being produced in the market indexes, they can also be identified an individual stocks and sectors. Gold prices were showing bullish trading based upon bullish J-hook patterns, allowing for identifying which individual stocks in the gold sector were also producing strong J-hook patterns. Because candlestick signals and patterns are based upon reoccurring investor sentiment, they produce trade set ups that not only produce high probabilities of positive trades but also puts investors in trade set ups that produce inordinately strong profits.

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June 10th Market Directions

The graphics of candlestick’s reveal much more powerful information about investor sentiment than any other technical charting. Today, the indexes traded positive again. The uptrend started with a very strong buy signal in the Dow, the best friend signal. Although today’s trading continued positive, the shooting star signal after gapping up on today’s open reveals the potential of a reversal/profit-taking level. Additionally, it is not unusual to see price movement, after breaching a potential resistance level, come back and test it to see if it will act as support. A lower open in the markets tomorrow would provide a high probability pullback to the 50 day moving average in both the Dow and the S&P 500. This would not necessarily indicate any major change of the current market uptrend but would be a high probability set up for some profit-taking to occur.

As the market continues higher, individual candlestick signal and patterns produce consistent profitable results. Not only are the results profitable, but the magnitude of the profits identified in candlestick patterns produce much stronger profit results. This is greatly beneficial to candlestick investors that recognize the reoccurring pattern setups that occur in human nature. Because candlestick signals and patterns create high probability trades set ups, it is not unusual to have a vast majority of a portfolio positioning working in the correct direction. This is not based upon any great stock picking ability, it is merely identifying how prices move based upon human nature.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

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June 6th Market Wrap-Up

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

Good Investing,

The Candlestick Forum Team

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June 3rd Market Direction

Being long or short during market trends is more of a natural evolution of portfolio management when utilizing candlestick analysis. When the markets are in an uptrend and in the overbought condition, the appearance of candlestick sell signals in the market indexes create the process of changing a portfolio from being predominantly long to being predominantly short. This is not an instant transaction. As the market indexes start to show weakness, individual stock charts will also start showing weakness but not necessarily all at the same time. This creates a natural process for candlestick investors to start taking profits in individual stock price moves that are now showing sell signals. This does not result in any given day a portfolio changes dramatically from long positions to short positions. As each individual stock chart start showing weakness or a sell signal, the natural process is to move money to a short position based upon the confirmation of the market in general. This usually occurs over a multiple day process as the indexes continue to show the direction of the markets.

Is this a bad market? Not if the portfolio was oriented now to the short side. With the markets in oversold conditions, adding new short positions would be a higher risk trade, even though there is no change of the market trend, but sitting in existing short positions is the comfortable strategy. The graphics of candlestick charts provide a powerful analytical tool. It produces the visual analysis of what is occurring in investor sentiment. This allows the candlestick investor to be positioned in the correct direction of the market trend with an extremely high probability.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

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May 30th Daily Wrap-Up

The trend/nature of the markets are much more easily analyzed when knowing the simple Doji rule and being able to analyze what the character of investor sentiment is revealing on a day to day basis. The current downtrend of the market is pretty well been confirmed due to the fact the market indexes have never been able to get back up above the T-line. There were prospects of a reversal with the NASDAQ and the S&P 500, being in the oversold condition, formed indecisive/Doji type days right off the 200 day moving average. This would have made for a logical bullish reversal based upon identifying bullish confirmation after the indecisive candlestick signals that just touched the 200 day moving average. However, Today’s positive trading did not illustrate a strong bullish reversal. Another day of indecisive trading. The lack of any bullish candle indicated there was not any major change of investor sentiment. It still has to be assumed that as long as the indexes continue to trade below the T-line, the downtrend remains in progress. A lower open tomorrow would create a bearish Doji sandwich in the Dow, indicating a bearish J-hook pattern was in progress. This would lead to wave three to the downside.

In this condition in the markets produces a stage where is just remaining short is the best strategy. Adding new short positions with the markets in the oversold condition produce a higher risk trade. Adding long positions without any major reversal signals doesn’t have a great profit potential based upon not seeing the markets in general stopping their downtrend. Any long positions has needed the lack of candlestick sell signals and closes below the T-line. This is where candlestick patterns, such as frypan bottoms and J-hook patterns produce a viable profit in bullish trades. But the big profit moves are going to be going with the flow, short positions in a downtrend. The simple scanning techniques of candlestick analysis allow investors to find the best bullish or bearish trades in any market conditions in less than 20 minutes each afternoon. Knowing which direction the general market is moving and being able to identify the individual stock chart patterns that are going to produce the best profits dramatically decreases an investors emotions and their trading.

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

Good Investing,

The Candlestick Forum Team

 

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May 23rd Market Wrap-Up

Learning how to utilize candlestick signals effectively is relatively easy. It’s all visual. When did the market indexes start showing bearish sentiment? That can be easily detected by going back and finding the strong candlestick sell signal and a close below the T line. How do you assess what the policies and arguments of Washington DC is going to affect the market trend? You can’t! But candlestick charts reveal how the overall investor sentiment is reacting to different tweets or soundbites coming out of Washington. The major benefit of candlestick analysis is it immediately illustrates what is occurring in the investment sentiment’s of the market trends and/or specific stocks and sectors. The bearish left/right combo in the Dow chart and the close below the T line illustrated a strong change of investor sentiment of the previous uptrend. Candlestick signals have been identified and utilized by Japanese Rice traders over the past few hundred years to show exactly when a trend is starting or ending. The probabilities of analyzing trend movement successfully are dramatically improved knowing how investor sentiment is graphically depicted. Having short positions in the portfolio’s over the past four weeks of trading produced great profits by merely being in the correct direction of the markets trend and stock trends based upon a powerful T-line rule. A candlestick reversal signal and a close below the T-line dramatically increases the probabilities of a downtrend until witnessing a candlestick buy signal and a close above the T-line. This is based upon excessive analysis for many centuries demonstrating the effects of investor sentiment. The short positions have produced very strong profits.

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

Good Investing,

The Candlestick Forum Team

 

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May 16th Market Wrap-Up

Candlestick analysis provides a very clear visual result at expected technical levels. The Dow formed a bullish Harami signal right at the 200 day moving average with stochastics in the oversold area. Confirmation of the support of the 200 day moving average was evident over yesterday in today’s trading. The ultimate confirmation was investor sentiment closing the indexes backup above the T line. Simply stated, candlestick bullish reversal signals formed in the oversold area at major support levels and then closed above the T-line. This all provides the visual evidence that there has been a major change of the downtrend. Knowing this, candlestick investors can be aggressively buying knowing what to expect after bullish reversal signals appearing in the oversold condition.

Having the ability to analyze what the overall market trend will be doing allows for the appropriate positioning of trades. Witnessing bullish signals forming in the indexes after a strong downtrend prepares an investor to start covering short positions, when bullish signals start appearing in individual stock positions, and start adding bullish positions back to the portfolio. This analysis helps diminish emotional trading. Because the results of candlestick signals produce high probability expectations, the candlestick investor can recognize when the probabilities are going against existing positions and when it is time to establish new positions in the opposite direction. This allows for identifying which candlestick reversal signals and patterns occurring in individual stock prices make for the highest profit trade set ups.

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

Good Investing,

The Candlestick Forum Team

 

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May 13th Market Direction

Candlestick formations reveal what is occurring in investor sentiment. However, there will be trends that do not reveal whether the Bulls or the Bears are in control on a day to day/time frame to time frame basis. That is what is occurring in the markets over the past few weeks. Fortunately, candlestick analysis has indicators that let investors sleep well at night. The T-line! The indexes have had whipsaw all reactions to the news coming out of Washington, especially in regards to the China tariff negotiations. How do you trade in these type of market conditions? The final confirmation, the T line. Note that after the indexes formed sell signals and close below the T line a few weeks ago, there has been one obvious factor. There hasn’t been confirmed buying above the T line. Why is this important? A simple candlestick observation! When a trend is trading below the T line, the probabilities are greatly favor a downtrend until there is a candlestick buy signal and a close backup above the T line. An uptrend trading above the T line will continue to remain an uptrend until a candlestick sell signal and a close below the T line is witnessed. This is called the T line rule. It dramatically improves the probabilities for allocating the correct positions in a portfolio.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

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