April 19th Market Directions

Applying the candlestick logic to market trend analysis allows candlestick investors to have the appropriate positioning in their portfolio/trading. This is true for trading stocks, currencies, commodities, any trading entity that involves fear and greed, which is everything. Join us this Saturday, April 24 for a mini spotlight training on the logic incorporated into candlestick analysis that constantly puts the probabilities in your favor. Click here for more information.

Sector rotation is still the predominant factor in this current market uptrend. Note that the Dow, when it consolidates, still has not been able to close back below the T line. The NASDAQ, however, after a dragonfly Doji/hanging man signal on Friday gapped down today indicating a much stronger selling pressure. This would indicate Dow related stocks will maintain uptrends while the NASDAQ related stocks might show some more profit-taking/selling. The analysis of individual trades is greatly enhanced by knowing the overall market nature. You dramatically improve the probabilities of being in the correct trade direction when using candlestick signals to evaluate which stock/sectors have the greatest upside or downside potential.

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April 15th Market Wrap Up

The market indexes are experiencing consolidation during the uptrend. The uptrend remains in progress as long as the indexes continue to trade above the T-line. A trend closing below the T-line after a candlestick sell signal is a much stronger confirmation there has been a change of investor sentiment. This is clearly illustrated in the April lean hogs chart, a large bearish engulfing signal last week and a close below the T-line was a strong indication the downtrend was in progress.

The steady uptrend of the markets allow candlestick investors to take advantage of the high profit/high probability pattern breakouts. The bobble breakouts continue to produce good trade set ups. Many stocks will slowly trend up in a slow uptrend of the markets. The advantage of candlestick analysis is it pinpoints which patterns are going to produce greater profits than merely an uptrending stock price. The J-hook pattern and bobble breakout pattern allows for identifying what the next price move will likely be. Wave three will usually be the same magnitude as wave one. This is what allows the candlestick investor to maximize profitability when the trend is moving in the analyzed direction.

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April 12th Market Direction

The market indexes continuing to trade above the T line allow for identifying some very powerful candlestick patterns. The bobble breakout is producing excellent trade set ups. The bobble breakout is merely a J-hook pattern with a much more defined price move, a failure initially at a resistance level, such as the 50 day moving average or the 200 day moving average, followed by a pullback usually to the T line, then coming back up through the resistance level. If you took the resistance level off the chart, you would still have a J-hook pattern. Our recommendation last week on NUAN bobble breakout resulted in good profits today. Did we know they were going to be bought out by Microsoft? Definitely not, but the bobble breakout revealed investors were buying the stock. Always the rhetorical question! Do all candlestick patterns result in big price moves? No, but the probabilities of being in a big price move is dramatically improved by knowing what investor sentiment does as far as creating reoccurring patterns.

The current market trend is not demonstrating any major change of investor sentiment, implying the uptrend remains in progress. This market environment makes candlestick pattern breakouts much more prevalent. The T line is the ultimate trend indicator when used in conjunction with candlestick signals and patterns. This combination dramatically improves the probabilities of being in and maintaining profitable trades

 

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Identifying the Strong Sectors

The strength in the indexes is most emphasized in the NASDAQ. Last week it formed a best friend signal which indicated the potential of a strong uptrend. The uptrend has been confirming with gapping up every day in that index. The Dow and S&P 500 continue to trade above the T line. This makes for very simple analysis. As long as the indexes continue to trade above the T line, the uptrend remains in progress. The fact that the uptrend is not yet showing any signs of bearish sentiment allows candlestick patterns to perform with a high degree of profitability. These profits of these price moves can be greatly enhanced with simple option strategies. Maximizing a price move profit can be done with very simple option strategies applied to the appropriate candlestick pattern move. Join us this Saturday for a full day training, starting with the basics of option trading and then applying simple strategies with the corresponding candlestick pattern breakout move. The markets are still exhibiting sector rotation. A major advantage of candlestick analysis is allowing an investor to see which sectors are starting to fizzle out and which new sectors are starting to act strong. Click here for more info.


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April 5th Market Direction

The best friend gap up signal last week in the NASDAQ, up through the T line, has continued to produce a strong uptrend. The continued gapping up of the NASDAQ, not yet in the overbought condition, produces strong probabilities of more upside. That prognosis is being confirmed with the Dow and S&P 500 continuing to trade above the T line. Expect some profit-taking but as of now there is not anything showing any bearish sentiment. This is allowing for the candlestick patterns to perform high profit trade results. The McMuffin pattern will produce double probability factors, a MorningStar signal implying upside, followed by a Doji sandwich implying upside. Combined the probabilities dramatically improve. The steel stocks continue to show good strength along with numerous biotech stocks. These big price moves can be predicted with a high degree of probability. Obviously, this allows for strong stock trades but more profitable with simple option trading strategies. Join us this Saturday for a full day training on how to apply the correct option trade strategies with the appropriate candlestick signals and patterns.http://special.stephenbigalow.com/41021-proven-candlestick-option-strategies/

 

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April 1st Market Wrap-Up

The NASDAQ formed a best friend signal yesterday, followed by a gap up today, at the 50 day moving average and then continue to trade higher. This shows very strong bullish sentiment. It broke above a wedge formation indicating the bulls of taking control. The Dow continue to trade above the T line. Electric vehicle stocks started a new uptrend. The steel company stocks continue to show good strength. It appears as if the stimulus money continues to hold this market in a bullish direction

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March 29th Market Direction

The market is producing a very good trading environment for having both long and short positions on at the same time. The Dow and the S&P 500 have been showing good strength, J-hook patterns, while the NASDAQ remains in a sideways wedge mode, making good short trade situations in the technology sector. This makes trading relatively simple for the candlestick investor. The strong bullish signals, such as the high probability expected results of an inverted hammer signal produces good profits. The sell signals have and are producing good profits in short trades. Buying puts in VIAC after a hanging man signal followed by a gap down produced excessive profitability. Currently there are still a good number of technology stocks that are in downtrends, in the process of producing bearish patterns such as bearish J-hook patterns. Until there is any dramatic change in the individual index charts, continue to maintain bullish trades that remain above the T-line and bearish trades that remain below the T-line.

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The Candlestick Forum team

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March 25th Market Wrap-Up

Although the NASDAQ is in a bearish trend, the Dow is showing indecisive trading. This provides the evaluation that the markets are not selling off with great fervor. Specific sectors continue to trade positive while others are trading lower, sector rotation is evident. The analysis of the market trend and specific sectors/stocks become much easier to analyze using the 12 major candlestick signals. The shooting star/Harami in the Dow last week indicated a reversal in investor sentiment. However, the downtrend of the Dow can be evaluated as being a very indecisive trading mode based upon witnessing bullish candlestick signals during the downtrend.

The strong trade set ups are still revealed by candlestick patterns. The J-hook pattern produces the probabilities of not only positive trades, but strong positive trades. RUBY and CYH both exhibited J-hook patterns that imply more upside. The advantage of recognizing candlestick signals allows for analyzing the price moves that have had strong historic results. The 12 major candlestick signals in conjunction with strong confirming indicators, such as the T line, produce an extremely high probability trading strategy. Join us this Saturday and Sunday for a two day comprehensive training identifying the 12 major candlestick signals and understanding the investment sentiment that created the signals. This combination allows an investor to analyze price movements with the same skills as a seasoned investor that may have been trading in the markets for 50 years. Members price $297 and you get to come back to this training for free every time it is presented. Click here to register.

 

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March 22nd Market Direction

The market indexes showed bullish signals, negating the strong sell signals of last week. The NASDAQ formed a bullish Harami on Friday with a gap-up follow-through in today’s trading. This immediately alerted candlestick investors to cover short positions that were not confirming. The Dow uses the T line as support, demonstrated by a bullish Harami signal. The analysis now infers that the bearish sentiment did not take control. This does not necessarily mean an uptrend is starting again, but it does imply that there is not any major selling off occurring. This still produces market conditions that allow for having profitable long and short positions established.

The electric vehicle sector has been in a profit-taking drift for the past six weeks. However, new bullish signals demonstrate the consolidation is over and the prospects of new strength coming into set sector is being observed. Note how QS and BLNK are showing good strong reversal patterns. AYRO can be bought aggressively on a bobble breakout on positive trading tomorrow. The Doji sandwiches also are appearing in numerous positions, creating very high probability trades setups. Note how the candlestick signals show the possibility of profit-taking and then illustrate when that profit-taking may be over. This visual information makes profitable trading much easier. Join us this weekend for a comprehensive two-day training on the logic and effectiveness of candlestick analysis. This is information that will improve your trading for the rest of your trading career.

 

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Major Market Candlestick Reversal Signals

The Dow produced a shooting star/Harami signal today in the overbought area. Look for lower trading tomorrow. This was accentuated with a bearish kicker signal in the NASDAQ. This combination produces strong probabilities that profit-taking/bearish sentiment is starting to take control. Today’s major candlestick reversal signals should immediately change the trade orientation of short-term and swing traders. The probabilities are extremely strong there will be more downside, you want to be trading in the bearish direction. A major advantage for candlestick investors is witnessing a change of investor sentiment well before most investors. Witnessing candlestick signals that are implying the bears have taken control allows for immediate closing of long positions that are not looking strong. Our recent morning and afternoon comments have been stressing to have both long and short positions in the portfolio. Individual candlestick signals provide much more clarity as far as assessing the direction of the overall market trend. This is information that you can utilize for trading candlestick analysis as your main trading platform or applying candlestick information to any trading system. The information built into each individual signal allows for a much more clear confirmation of price movements. Join us on March 27 and 28th for a two-day full comprehensive training on how to utilize candlestick signals. This will change your investment perspectives for the rest of your investment career.

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The Candlestick Forum team

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