October 17th Market Wrap-Up

The continued uptrend of the markets are still a result of the bullish flutter kicker of last week. The strength of that signal allows the candlestick investor to anticipate that the top of the wedge formation is still the likely target. That allows for the expectation of additional upside for at least the next day or two. The candlestick investor also has the advantage of being able to recognize what is occurring in investor sentiment once a major resistance level is hit. Indecisive trading at that level, such as Doji’s or shooting stars, indicate a much higher probability that it is time to take profits at those levels. A breakthrough of the resistance level with a good solid candle indicates the lack of any concern for that resistance level anymore, implying more upside. Because each candlestick signal and pattern produce expected results, a trend is much more easily analyzed knowing what the nature of each signal or pattern represents.

Utilizing the information built into a pattern produces much higher probabilities of participating in a breakout price move at the appropriate time. As illustrated in our recommendation on WLH, the gap up through the resistance level confirmed the frypan bottom breakout. Being able to visually recognize today’s trading was an indecisive/Doji type day produces an extremely high probability profitable trade entry based upon a positive open tomorrow. A positive open, utilizing the Doji rule, would produce a high probability of more upside. This would create a bullish Doji sandwich breakout. When analyzing where the breakout should occur and then seeing a strong candlestick signal that would confirm a bullish breakout, the candlestick investor will not only have high probabilities of a correct trade but the additional benefit of an extremely strong price move. Combining candlestick signals with candlestick patterns produces the opportunity to participate in huge price movements based upon the results of investor sentiment.

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October 14th Market Direction

Last week, the bullish flutter kicker signal produced very strong evidence the Bulls were stepping back in with great force. This indicated the sideways wedge formation in the indexes was still intact. That evaluation provides a strong expectation for establishing or maintaining positions in the portfolio. Investor sentiment was revealing a lack of major bullish pressure as well as a lack of a major bearish pressure in the overall market trend. This makes the analysis of each individual stock chart the most predominant factor. The lack of any major trend movement reduces the prospects that uptrending bullish candlestick patterns will be reversed due to any strong market selling. Short positions have the same results, downtrending stock positions can be maintained with the lack of any significant bullish pressure in the markets. Simple candlestick scanning techniques reveal shipping stocks as a strong bullish sector and the weed stocks are still downtrending, good short positions.

When the market indexes are in a sideways mode, the candlestick investor has a great advantage of being able to analyze which stock charts are producing pattern setups for identifying the potential of big breakout price moves. A candlestick pattern, moving up to a observable resistance level, produces an extremely high probability of a correct trade result. But more so, this set up has the prospects of producing excessive profit movements. Because human nature works the same way time after time, it produces a great advantage for the candlestick investor that understands why eight pattern is being created. A frypan bottom pattern coming up to a resistance level, as illustrated in the NVDA chart, produces an expectation of a strong breakout if that resistance level is breached. Numerous candlestick patterns, in conjunction with a candlestick signal at a breakout level dramatically improves the probabilities of being in a very strong price move.

 

 

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October 10th Market Wrap Up

Today’s positive trading was well anticipated. The setup for a bullish flutter kicker was established in Wednesdays trading. The bullish flutter kicker signal is one of your strongest candlestick reversal signals. It is created when the trading gaps up to the top of the previous day’s open, which had been a bearish candle, and forms a Doji. The gap up itself was a sign of a potential reversal. Once the Doji was formed, a bullish flutter kicker signal is easily recognized as well as anticipated. The Doji rule – prices will usually move in the direction of how they open after a Doji, makes entering profitable trades an immediate process. The bullish flutter kicker signal as anticipated as soon as there is a positive open after the Doji. Knowing this signal is being created allows for establishing profitable positions upon the open.

Anticipating the market indexes are going to trade positive allows a candlestick investor to immediately establish bullish positions in individual stock charts that are also creating bullish flutter kicker signals. NVDA and AAPL had bullish flutter kicker set ups. This is where the 2+2 analysis greatly improves the probabilities of being in a profitable trade. A bullish flutter kicker signal in NVDA provided clear evidence the frypan bottom pattern was going to stay above the T-line, implying more upside.AAPL produce the same scenario, a frypan bottom pattern that would be confirmed with a positive open after yesterday’s Doji, illustrating a breakout of the observable resistance level. Candlestick charts allow for the analysis of a build up of investor sentiment, creating a candlestick pattern. Identifying a strong bullish candlestick signal at a breakout level dramatically improves being in the appropriate trade at the appropriate time. This is merely taking advantage of the consistent patterns that are created by human nature time after time.

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October 7th Market Direction

The indecisive trading of today was not unexpected after the strong reversal of last week. The profit-taking, creating the indecisive Doji day Today was occurring at technical levels that were be in watched by all investors, the 50 day moving average. The Dow closed right on the 50 day moving average while the NASDAQ after trading higher started resisting and selling off at the 50 day moving average. The T-line remains a relevant indicator. The positive trading of last week improved bullish investor sentiment after the indexes bounced up with candlestick reversal signals at support levels such as the 200 day moving average. There is a trend channel being created in the indexes, implying a sideways motion in the markets. However, with support being shown at the low end of the trend channel, investor sentiment although moving from aggressively negative, is not dramatically bullish either. Because of where bullish and bearish signals have occurred over the past few months, it is much easier to graphically evaluate the lack of any major trend in the current market. Fortunately, the simplicity of candlestick scanning techniques allow for identifying the strongest bullish charts as well as bearish charts. These market conditions allow the candlestick investor to be making money by having both bullish and bearish positions in the portfolio.

The number of bullish chart setups has grown over the past few days of trading. This not only indicates a build up of investor confidence, it allows the candlestick investor to pinpoint the strongest potential trades. Currently, numerous frypan bottom patterns, cradle patterns, and McMuffin patterns are being formed. These strong bullish patterns allows for executing high probability profit trades even though the overall market trend remains in a sideways mode. The expectation of results from candlestick patterns dramatically improves the probabilities of being in a profitable trade as well as highly profitable trades. A McMuffin pattern,as demonstrated in our recommendation of TLRA, was based upon the expected results of that pattern set up. Simple candlestick analysis allows investors to identify which trades produce the highest probability results.

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October 3rd Market Wrap-Up

Candlestick charts reveal much more clearly what is occurring at technical levels, such as the support level at the 200 day moving average, whether there has been a true reversal once that level was it or whether it was merely a bounce. The fact that the indexes created bullish hammer signals today after touching the 200 day moving average area provided significant information. The hammer signal, one of the 12 major candlestick signals, was a good indication the Bulls started stepping in today. Even more refined was the fact that the 200 day moving average was the obvious level that might act as support, with that assumption, when prices reached those levels, moving to the 10 minute chart revealed more immediately what was occurring in investor sentiment at that support level. Witnessing a candlestick reversal signal at that level on the 10 minute chart allows the candlestick investor to close short positions and add long positions to the portfolio at the exact appropriate trading levels. The 10 minute chart works very effectively in conjunction with the daily chart when prices/trends start moving dramatically into the overbought or oversold conditions.

Numerous bullish reversal signals were created in charts such as NVDA and ROKU. The recognition of those signals pinpoint which trades are going to be most effective based upon the strong candlestick reversal signals. Just because the market had a major reversal today does not necessarily mean all stocks showed strong prospects of an uptrend. AAPL, AMZN, NFLX created charts that showed the selling may have stopped but not any indication any strong buying had occurred. Understanding which candlestick signals provide the strongest reversal patterns allows investors to be in the appropriate trades that are going to produce the best profitability. A positive open tomorrow would create a high probability bounce at least back up to the 50 day moving average/T-line area. The best profitable trading technique is executing the trades in the strongest candlestick charts. This is what constantly allows for the cultivation of being in the best trades at the appropriate times.

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September 30th Market Direction

After trading positive most of the day, although the Dow finished positive, it closed at or below the T-line. This is a very significant factor. It can be easily visually observed that there is no direction in the overall market trend. The simple T-line rule is basically a probability indicator stating that a trend will remain in a direction if there isn’t a candlestick reversal signal and a close backup above or below the T-line. Currently, the Dow indicates the downtrend remains in progress without a close backup above the T-line. The market sideways mode is still in progress. The character of the market is illustrated by trend movement followed by a sustained sideways trading mode, then followed by a trend and again followed by a sideways trading mode. That is the condition of the markets today. This puts more importance on analyzing each individual stock and sectors. Easy candlestick sectors scans can demonstrate which sectors are acting the most bullish or bearish. This makes for logical scanning of individual stocks in those sectors, as illustrated in the recreational vehicle sector.

What continues to produce good steady profits is the recognition of the strong signals and patterns. Our recommendation on VC was based upon witnessing a belt hold signal that was further confirming a J-hook/frypan bottom trending move. Once you learn the 12 major signals and apply that information to reoccurring candlestick patterns, you put the probabilities dramatically in your favor. Identifying strong patterns produces a dual benefit. The patterns produce sustained profitability even if the overall market trend is sluggish. Additionally, the results of a candlestick pattern is usually much more excessive than merely a trending stock price.

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September 26th Market Wrap-Up

The graphics of candlestick charts make it much easier to see the nature of a price trend. As illustrated in the Dow, not only is the trend moving sideways but the visual graphics make it much more clear to see the indecisive nature that is in the current sideways trend, a bullish candle one day, a bearish candle the next day, repeating. This provides valuable information to the candlestick investor. The whole point of candlestick analysis is to analyze the strength of the Bulls or the Bears. This dramatically improves the probabilities by knowing whether to have a portfolio oriented toward the bullish direction or the bearish direction. Candlestick charts also reveal when there is no advantage being conveyed from the charts. Over the past couple of months, the nature of the market trends have been at up trend followed by an indecisive sideways trading range. A downtrend followed by an indecisive trading range, and currently after the most recent uptrend, the markets are in an indecisive sideways trading range. Why is this analysis relevant? Because there will be stages of market trading that illustrates when to have funds oriented toward the bullish or bearish direction. There will also be times when the candlestick charts demonstrate when to not be fully exposed to market risk, sitting more in cash.

The last uptrend of the market showed a change of investor sentiment with Doji’s in the overbought condition followed by a gap down toward the T line. This was good evidence that the majority of the bullish sentiment disappeared. Logic dictated that long positions that were starting to show weakness could be closed and short positions added to the portfolio. A very simple T line rule has provided good profitability in downtrending price moves based upon candlestick sell signals and a close below the T-line. ROKU and SPB are good examples of taking advantage of strong sell signals when the overall market conditions indicate bullish sentiment is starting to diminish. The major advantage of candlestick charts is the revealing of when Bulls are starting to take control or Bears are starting to take control.

 

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September 23rd Market Direction

The lower close on Friday illustrated a very relevant point! The T line has very strong ramifications. Because candlestick analysis is the graphic depiction of human nature and the T line acts as a natural support and resistance level of human nature, when you combine candlestick signals and patterns with the T line analysis, you gain a very powerful trend indicator that dramatically puts the probabilities in your favor. When the Dow and the NASDAQ closed below the T line on Friday, the probabilities of lower trading improves dramatically. Utilizing the combination of candlestick signals and the T line makes analyzing a trend very easy. When a price/trend closes below the T line in an uptrend, to relevant visual aspects can be concluded. First, the T line has already demonstrated that a close below the T line greatly improves the probabilities of a trend moving lower and secondly, visually it can be seen that the bullish force has now dissipated. The visual analysis of the market in general provides the first elements of whether to be long or short as the overall bias of a portfolio.

The markets closing below the T line on Friday provided much more reason for scanning for short trades set ups. This is merely common sense. If the probabilities indicate the sellers are taking control, scanning for short positions becomes the stronger profit potential. Our recommendation on shorting W was based upon identifying the sell signals that had occurred at the 200 day moving average resistance level, spinning tops, a hanging man signal, a bearish engulfing signal, followed by a close below the T line and a gap down Doji below the 50 day moving average. Lower trading today would confirm the downtrend with the probability of a bearish Doji sandwich forming. Because human nature works the same way time after time, the candlestick investor gains a huge advantage of being able to identify sell signals that are probably going to perform based upon the additional evidence the overall market is starting to sell off.

 

 

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September 19th Market Wrap-Up

Today’s indecisive trading in the markets continues to demonstrate one important trend factor, the indexes are still trading above the T line. There is prospects of a J-hook pattern forming in each of the indexes. This would have very relevant ramifications for the next trend move. If wave three equates to wave one of a J-hook pattern, that means the market indexes will be moving to all-time highs. Currently there is no major change of investor sentiment as long as the indexes continue to trade above the T line without any candlestick reversal signals. This analysis allows investors to maintain positions on trading days that normally make most investors nervous. Because human nature works the same way time after time, utilizing the simple trend indicators in conjunction with candlestick signals and patterns keeps an investor from being whipsawed in and out of positions.

The J-hook pattern and the frypan bottom pattern have produced trade set ups that have high probabilities of not only moving in the correct direction but also with a strong price move. When a candlestick pattern is developing while using the T line as a support level, it adds that much more credibility to the pattern expectations. This could be seen in a number of stock positions in today’s trading. There are two major benefits of utilizing candlestick patterns. First, the probabilities of a trade moving in the expected direction is extremely high. This is based upon hundreds of years of witnessing what occurs in human nature. Secondly, the results of patterns usually create much stronger returns than merely uptrending stocks during an uptrending market. Having this information allows an investor to dramatically improve the profitability of their portfolio by not only being in the right place at the right time, but also being in very strong price moves at the right time.

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September 16th Market Direction

The Dow formed Doji’s in the overbought condition on Thursday and Friday of last week. This created the prospects that a lower open in Monday’s trading would indicate at least a profit-taking pullback to the T-line area. The attack on the Saudi Arabian oilfields provided the stimulus for selling on the open today. Was this evidence of a market reversal? Because candlestick analysis is based upon a visual assessment of investor sentiment, analyzing the overall market trend can be done in the matter of seconds when knowing what should occur after candlestick signals in conjunction with high probability trend indicators. The analysis of the trend using only the Dow would not provide a full assessment of investor sentiment. Although the NASDAQ closed lower today, it opened at the T line and began trading positive. This clearly illustrated that there weren’t selling forces occurring in the NASDAQ, buying was occurring after the open. The S&P 500 traded lower but traded at the same level as where it opened, creating an indecisive Doji day. This immediately reveals the selling was not being done with any great conviction. But there is one additional very compelling indication the markets were not going to be selling off with great aggressiveness. The number of bullish charts continuing to trade bullish! Candlestick signals and patterns are created by the graphic depiction of human nature. An accumulated watchlist of candlestick charts can be a good indicator when revealing that a large percentage of bullish patterns continue to trade bullish indicates there is not any across-the-board selling of the markets. The results of bullish candlestick charts not only indicate that the market is not selling off, they are also allowing for profitability of a portfolio based upon the results of those charts versus the market direction be in the predominant profit element.

When numerous positions continue to trade positive in a sluggish or bearish trending market day, it can be assumed that there isn’t a rampant selling occurring in all positions, the market in general may just be consolidating. Candlestick analysis provides two very powerful analytical aspects. First, it identifies when investor sentiment is indicating a high probability of a bullish or bearish move, such as our recommendation on NVAX, utilizing the candlestick signals at support areas such as the 50 day moving average that everybody else’s watching. Secondly, with crude oil prices jumping up dramatically, the candlestick charts reveal that oil stocks are gaining the most bullish sentiment. The strongest bullish signals can now be utilized to identify which of those stocks in that sector are going to perform the best. Today, numerous best friend signals at breakout levels provide a simple visual method to cultivate the best trades based upon influences of that sector. This is a process of a utilizing the information built into candlestick charts to put your investment funds in the most powerful investment positions.

 

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