September 24th Market Wrap-Up

One of the most powerful trend indicators is the T-line, a natural support and resistance level of human nature. Add that to the graphics of candlestick signals and patterns which are the graphic depiction of investor sentiment, you have created an extremely accurate trend indicator combination. The mental process is very simple. If you see the market indexes closing below the T-line, the mental strategy should now be oriented toward closing out long positions that are showing weakness and establishing short positions. This process allows you to consistently be in correlation with the overall trend of the market, putting the probabilities in your favor.

There will be stocks that go up in a down market but obviously there will be more bearish opportunities with more strength in a down trending market. The same is obviously true in an uptrend, the uptrending stocks are likely to have much more strength. Identifying positions to start shorting is a very simple visual process with candlestick analysis. Signals, followed by a gap down’s, are very high probability short trades. Add the additional confirmation of a gap down in price closing below the T line produces additional confirmation the bears are definitely in control. Having the ability to recognize the direction of a price trend with a high degree of accuracy allows investors to keep their emotions out of their trading decisions. Join us this Saturday, September 26 for a full day of applying candlestick logic and information into your analysis that eliminates emotional decision-making. The effectiveness of any trading strategy is the combination of applying the mechanics of the trade and having the correct mental status to trade successfully. You will dramatically improve your trading abilities and profitability with this combination. www.stephenbigalow.com/fight-the-fear

 

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September 21st Market Direction

The buildup of investor sentiment in specific candlestick patterns has the probability of producing bullish trade profitability even when the overall market is selling off hard. Our recommendation on CLSK a set up for a frypan bottom pattern. It traded up 28% on the day. The candlestick investor has the advantage of having positions in the portfolio that are still going to produce profits or at least not selloff dramatically when the overall market is selling off.

Two notable candlestick factors are being illustrated today. First, the T line rule! As the indexes were demonstrating, when trading below the T line, the probabilities of the down trend is extremely strong. Although the Dow appeared to be supporting at the 50 day moving average on Friday, it did not do any candlestick formation that illustrated the bulls were back in control. The NASDAQ and the S&P 500 did not show any evidence of bullish sentiment on Friday, trading below the T line, indicating more downside. Secondly, numerous recent recommendations, that were based upon candlestick patterns, are holding up well, either trading positive, CLSK, VVPR, SHLL, ZM or trading relatively flat today PEIX,WKHS,APPS. This demonstrates an underlying benefit of trading pattern. It allows for more time to get out of a trade reasonably well even though the overall market is dropping heavily.

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September 17th Market Wrap-Up

Today’s market action clearly illustrated how candlestick patterns work effectively in spite of the overall market direction. Frypan bottom patterns are producing very strong profits, DKNG, WKHS, and PENN all moved up with good strength even though the indexes were trading off. The “message” is another high-profit trade set-up that works extremely effectively. Today KODK confirmed the “message” of yesterday.SRNE provides the same opportunity. Today’s gap up, followed by profit-taking, produces a high probability trade entry on any positive trading tomorrow. Utilizing the patterns and signals setups allows candlestick investors to constantly produce profitable trades in their portfolio.

Today’s gap down in the indexes showed a little bit of recovery but not enough to indicate the bulls or the bears being in control. This provides a sideways market potential. Fortunately for the candlestick investor, the sideways mode of the general market does not deter being able to scan for high-profit trades. Once a good trade is executed, the T line is one of the most productive trend indicators. When used with candlestick signals and patterns, the natural support and resistance level of the T-line dramatically enhances the probabilities of a trend continuing. Utilizing this combination keeps investors from getting whipsawed in and out of profitable trades. Having the ability to analyze a trend correctly keeps the emotional decision-making process out of one’s investing. Join us September 26 for a full-day training of how the common sense aspects built into candlestick analysis dramatically reduces your emotional investment flaws.

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September 14th Market Direction

Is the market trend reversing? Candlestick signals at relevant technical levels, that everybody else is watching, produces good evidence the bulls are starting to take control again. The Dow formed a MorningStar signal today, off the 34 EMA, and closed above the T-line. The NASDAQ gapped up, above the open of Friday, and formed a Doji. This sets up a strong probability that a positive open tomorrow is going to create a bullish flutter kicker signal, one of the strongest reversal signals, and the likelihood of closing above the T-line. This adds good evidence the uptrend may be back in progress. Utilizing the transportation index also allowed for assuming there was not going to be a major reversal in the markets with the simple logic that if one index is trading strong while other indexes are trading lower, it merely indicates funds moving from sector to sector, not leaving the market.

Fry pan bottom patterns continue to produce very strong profitable trade results. A number of fry pan bottom patterns are in effect, i.e. WKHS, DAR, PENN, DKNG. All boats will rise in a rising tide but the results of candlestick pattern breakouts are boats that are going to rise a heck of a lot faster. The information built into each candlestick signal allows the candlestick investor to have a much more clear analysis of a price move based upon the historical results of the candlestick signals and patterns. This also creates a trading program that dramatically reduces emotional trading. Expected results that have been proven for hundreds of years, based upon normal human nature reactions, allows the candlestick investor to be in high probability trades with a high degree of accuracy.

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September 10th Market Wrap-Up

The T-line is a very accurate trend indicator when used in conjunction with candlestick analysis. A close below the T-line after a candlestick sell signal produces extremely strong probabilities the downtrend will remain in progress, until you see a candlestick buy signal and a close back up above the T-line. This rule kept candlestick investors from investing heavily to the long side yesterday when the buying came back into the market indexes, demonstrating good strength. The strength did not close the indexes above the T-line. The combination of candlestick signals and patterns in conjunction with the use of the T-line dramatically improves the probabilities of remaining in a trend, keeping investors from getting whipsawed out of a profitable position too early. The fact that candlestick signals and patterns are the graphic depiction of investor sentiment and the T-line acts as a natural support and resistance level of human nature, combining these two visual aspects produces extremely high probability trade results.

Our recommendations in TUP and ANF continue to act well because of the fry pan bottom expectations. Candlestick patterns will continue to produce good profits when the market in general turns the opposite direction because of the buildup of investor sentiment that was creating that pattern. The J-hook pattern has the same characteristics as illustrated in our recent recommendation of HIBB. These trades illustrate the fact that bullish profits can still be made when the markets are trading lower. However, going with the flow is enhanced with the visual ability to analyze the overall direction of the market. Identifying the strong sell signals when the market is heading lower dramatically improves the probabilities of making good profits in short positions. This is merely simple candlestick analysis logic.

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September 8th Market Direction

Candlestick investors have a distinct advantage. The graphics of candlesticks allows an investor to take profits at the appropriate time, not always having a sell signal occur. As illustrated in the market indexes last week, the gap up in the overbought condition was an alert to start taking profits. Where do most people buy? Exuberantly at the top! This is constantly professed by the Japanese rice traders that had studied the graphics of human nature for hundreds of years. Join us tonight with a demonstration of the indicators that human nature produces for when it’s time to take profits.

Another major benefit of candlestick patterns is not only the direction and magnitude of a price trend, but also the residue strength that continues to keep that pattern from selling off if/when there is a strong market reversal. This is illustrated in our recommendation on TUP and SHLL, fry pan bottom continuation patterns. Our recommendation on ANF was based upon a bobble breakout/J Hook pattern which also will continue to show strength in spite of the overall market trend. The underlying factor of candlestick analysis is that it puts investment funds in the appropriate trades at the appropriate time. This dramatically improves the probabilities of producing profits in spite of the overall market direction

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September 3rd Market Wrap-Up

Candlestick investors have a huge advantage for identifying when a reversal is about to occur. The Japanese rice traders profess very simple results of human nature, where do most people buy? They buy exuberantly at the top. Yesterday, it was recommended, in our afternoon comments, to take profits. This recommendation was the result of witnessing the markets gap up in the overbought condition. This illustrated exuberance. The NASDAQ gapped up and formed a Hanging Man/Doji signal. This produced the alert for a reversal in the market trend. A lower open, after a Hanging Man signal, induces taking profits immediately. Having this type of forewarning, based upon normal human nature, allows the candlestick investor to create much better profitability by getting out of positions knowing that the market trend has a high probability of reversing.

There are very strong benefits of utilizing candlestick patterns. Our recommendation of TUP was based upon a fry pan bottom breakout this past week. There are three major advantages to trading candlestick patterns. First, the probabilities of being in the right direction is extremely strong. Secondly, the magnitude of a pattern breakout move will be much greater than merely up trending stocks during an up trending market. Finally, because a pattern is a buildup of investor sentiment, prices will usually hold up much better even when the general market might move excessively in the opposite direction. This gives the investor more time to get out of a trade profitably. Individual candlestick signals, such as the kicker signal and the bearish left/right combo provided strong short trade expectations. The candlestick signals and patterns produce dramatically greater probabilities of being in strong profitable trades.

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August 31st Market Direction

The Dow traded lower while the NASDAQ traded higher, indicating there was no major change of investor sentiment in the current market trend. This merely indicates rotation of sectors. Gold has started to trade higher again, making the gold stocks a viable sector. LABU is a good indicator to illustrate the biotech sector is starting to show strength. The major advantage of candlestick analysis is allowing an investor to identify where bullish funds are moving to. Having this information dramatically improves the probability of having trades applied to the stock/sectors that will have better bullish results. Adding the analytical factor of candlestick signals and patterns to individual stock charts increases profitability when trading the candlestick patterns that are starting to breakout. This is not a difficult process. The high probability signals and patterns are easily identified.

The frypan bottom pattern is working exceptionally well during this uptrend. New fry pan bottom setups are identified in MCRB and TUP. NIO is currently benefiting from the frypan bottom trajectory. There is a very simple trading rule when entering a frypan bottom pattern. You can stay long as long as the trend continues to trade above the T line. Last week, numerous J-hook patterns are performing very well. Our recommendation tomorrow on TRIL will be based upon wave three of a J-hook pattern confirmed today. Recognizing when a pattern breakout is about to occur provides the optimal entry point, whether buying stock or options. This produces a trading platform that minimizes having to sit in a trade waiting for it to perform. A pattern breakout is the exact point for entering a trade knowing that it is going to perform well right at that time.

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August 27th Market Wrap-Up

The candlestick investor has a comforting benefit when putting on a trade, using candlestick signals. The probability of a profitable trade is greatly in their favor. Probabilities! That is an important definition. Candlestick signals and patterns produce high probability results based on hundreds of years of historical results. Not only are the probabilities of being in a correct direction, but the magnitude of the strong signals and patterns produce much greater profitability than merely up trending stocks during an up-trending market. Common sense logic produces a profitable trading strategy for candlestick investors. The signals and patterns show when a high probability trades set up is in progress and the signals and patterns also can be visually analyzed to see when that signal or pattern is not producing. This allows for the proverbial cutting your losses short and letting your profits run.

Convergence analysis is the accumulation of multiple buy formations, adding credibility to a buying decision. This is illustrated in today’s trading of MDT. A gap up through the 200 day moving average produced a message signal. The gap up through the 200 day moving average also produced a bobble breakout. Yesterday’s trading illustrated the previous day’s message, profit-taking was over. Today’s positive trading illustrated the strength created by the message signal was continuing. Add the fact that MDT broke out through the 200 day moving average also confirmed a breakout of a large fry pan bottom pattern. A steady market trend, not producing any sell indications, produces the environment that allows investor sentiment to enhance the bullish pattern breakouts.

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August 24th Market Direction

The up-trending market remains obvious. The indexes consistently trade above the T-line. The Dow has actually formed a J-hook pattern set up off the T-line. This implies wave three is about ready to start, more upside is expected. The advantage of being able to analyze the overall market trend with a high degree of accuracy allows the candlestick investor to pinpoint which stock charts are producing the strongest pattern setups. Currently, J-hook patterns are producing very strong upside potential. The cradle pattern that formed in SHLL produced an uptrend that incorporated a J-hook pattern. Today’s strong move in SHLL today has used those patterns to produce a big frypan bottom breakout pattern. The candlestick investor gains a huge advantage by being able to recognize the reoccurring price moves that are created over and over by human nature. The probabilities of being in the right place at the right time are dramatically improved utilizing candlestick patterns.

TWLO gapped up today, producing a frypan bottom breakout. Many stock prices will move up during an up-trending market. Many will not! But utilizing the information built into pattern setups allows investors not only to be in a bullish move, but participating in bullish moves that will be much stronger than mere up trending stocks in an up trending market. TWLO can be bought on positive trading tomorrow, indicating a frypan bottom breakout. Big profits can be made in both buying the stocks and/or having the optimal entry points for strong moves for option trades.

 

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