Lethargic trading days, in the overall market, amplify the significance of candlestick signals and patterns. The market indexes are trading relatively sideways for the past few days. The Dow below the T line, the NASDAQ above the T line, indicating no major direction in the markets. Fortunately, candlestick patterns allow for consistent profitability. Note how the fry pan bottom patterns continue to show good strength. Add the analysis of the Doji sandwich confirming the probabilities of the fry pan bottom’s performing. You gain valuable insights as far as establishing high probability/maximum profit trading strategies. Join us this Saturday for a comprehensive analysis identifying the high profit breakout set ups utilizing candlestick patterns. Then, learn how to apply the appropriate trading strategies, stock and/or option positions. Having a high degree of probability that a price will not only continue to move in the correct direction, but also with a very strong price move, logical option strategies can be put in place to maximize profitability while at the same time dramatically reducing risk.

Our recommendation on NVAX was based upon a fry pan bottom set up with the expectation of more upside after yesterday’s Doji sandwich. LVGO produced the same scenario with the expectation of the development of a Doji sandwich also furthering a fry pan bottom trajectory. Learn how to develop high profit option strategies very quickly and easily knowing what to expect coming from a candlestick pattern set up. Knowing what each pattern and signal implies, based upon centuries of confirming results, produces a trading strategy that constantly puts the probabilities in your favor. Join us this Saturday, you will gain valuable insights on how to maximize your profitability. You will not be disappointed. https://special.stephenbigalow.com/breakout-trading/

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The Candlestick Forum team.

Did candlestick charts indicate selling today? Yes! Was the magnitude of the selling anticipated? No, but candlestick charts revealed that taking profits was viable and adding short positions to the portfolio was viable. This puts the candlestick investor in the right direction at the right time!

The graphics of candlestick signals revealed a changing of investor sentiment. Did the signals reveal the magnitude of today’s selling potential? Definitely not, but it put candlestick investors in the position of benefiting from the strong selling, either by having taking profits over the past few days and adding some short positions to the portfolio. The Dow, S&P 500, and the Russell 2000 formed island reversals. These are very strong trend indicators. This would suggest there is more downside to the markets. Any long positions still existing in the portfolio should be producing compelling reasons to stay long. Otherwise, the probabilities based upon candlestick formations and patterns indicate having some short positions in place and maintaining a larger cash position until the market provides better indications the downtrend has stopped.

The strength of the selling today has produced numerous bearish kicker signals. These can be utilized based upon seeing the premarket futures indicating the markets are going to open lower again tomorrow. Due to the magnitude of the selling today, having cash available allows for watching if/when the market will bottom and being able to move aggressively if the markets reverse back to the upside. Utilize the 10 minute chart. This is a simple process. If the Dow moves all the way down to the 50 day moving average with the excess of selling tomorrow, watch to see what occurs on the 10 minute chart to demonstrate whether the 50 day moving average is a likely support level. If the market appears to be trading in a particular direction, the 10 minute chart on individual stock charts becomes a very valuable trading tool.

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What do you buy when the market is up strong? That is what makes candlestick analysis more clear, the positions that are producing big profits were already established based upon candlestick patterns. The simple process of analyzing the market trend and scanning for the strongest stock/sectors during an uptrend allows the candlestick investor to already be in trades at the appropriate levels. Current profits in many positions is not 5%, 10%, 15%, but more in the ranges of 30%, 60%, 100% plus. Utilizing the T line also helps from taking profits too early, a syndrome that keeps most investors from producing anything more than mediocre returns. The J Hook pattern, bobble breakout pattern, and the fry pan bottom breakout has produced excessive profitability during this uptrend.

BA exhibited a fry pan bottom breakout. Numerous other recommendations have produced huge profits based upon a combination of fry pan bottom patterns, followed by a J-hook pattern, called the classic pattern. Do not take profits just for the sake of taking profits. This is one of the big mistakes most investors make. At worst, take profits on partial positions. But until there is an identifiable market reversal and/or individual stock positions reveal sell signals and a close below the T line, the markets continue to reveal the uptrend is in progress. Take advantage of what investor sentiment is demonstrating.

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Numerous candlestick charts are producing high probability/high-profit trade results. This is based upon the convergence of buy signals and buy patterns at the optimal breakout points. Currently, the market indexes have been in steady up-trends based upon the indexes not able to close below the T line. The Dow went from a Piercing signal off the 50-day moving average to the next likely resistance level, the 200 day moving average. That becomes an obvious level to see whether investors were ready to take profits. Today’s trading made that analysis very simple, it formed a Doji. The Doji rule allows for accurate assessment of whether the trend will continue or whether more profit-taking will occur now that the 200-day moving average has been touched. A lower open tomorrow would imply profit-taking at the 200 moving average is now occurring.

Although the markets backed off today, specific sectors produced some very strong bullish patterns. The airline sector has been producing good profits based upon a combination of fry pan bottom and J Hook pattern breakouts. Recognizing the pattern breakout levels allow candlestick investors to enter high probability profit trades at the ultimate entry points. These market conditions are allowing for simple candlestick scanning techniques to identify strong bullish charts as well as strong bearish charts. Be prepared for some profit-taking in the market indexes, making having both long and short positions in the portfolio for the next few trading days the viable strategy. Join us this weekend June 6, for a spotlight training on how to recognize the set ups for the explosive breakout moves.www.stephenbigalow.com/Identifying-Breakouts

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Good investing,

The Candlestick Forum team.

The definition of a bull market is an uptrending market in spite of massive negative news. The indexes continue their uptrend in the trend channel with both the Dow and the NASDAQ continuing to trade above the T-line. Today’s positive trading occurring even though the news broadcasts filmed dozens of cities being burnt. Candlestick charts reveal what is actually occurring in investor sentiment versus what each of us may think should be occurring in the market trend. The slow uptrend of the markets indicates the lack of any great exuberance, merely steady buying. These types of market conditions allow for the candlestick patterns to work excessively well, not having investor sentiment concerned about any selling pressures. The J Hook pattern has produced a very good profits. Patterns have two major advantages. They produce extremely high probabilities of a direction of a price move and they also provide price moves much stronger than merely up trending stocks during an uptrend. Knowing the results of candlestick signals and patterns give you a competitive edge.

ZM and CRWD produced very strong profits, a scoop pattern and a J-hook pattern. BYND is setting up for a scoop pattern breakout if it opens positive tomorrow. There have been numerous J-hook patterns setting up and producing profits ,FVRR, FSLY, DOCU, OKTA , and many more. Knowing which patterns will produce the biggest profits during an uptrend allows investors to maximize profitability when the markets are trading positive, essentially optimizing the term making hay while the sun shines. Candlestick signals and patterns dramatically improve the probabilities of making profitable trades and participating in trades that will produce large profits.

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The indexes produced some potential candlestick sell signals today. The Dow formed a Dark Cloud signal in the overbought condition. However, it is still trading an uptrend above the 3T line, let alone the T line. This implies there might be some profit-taking pullback but not necessarily a full-scale reversal. The NASDAQ, after forming a Hanging Man type signal yesterday, formed a Shooting Star Doji today. This makes the premarket futures a valuable insight into whether there’s going to be some profit-taking over the next few days. A lower open would imply profit-taking tomorrow. This allows the candlestick investor to make a much more accurate assessment as to whether to take profits in long positions and add a few short positions to the portfolio. Numerous bullish positions showed indecisive/bearish potential signals today. The position cultivation process becomes simple when witnessing potential sell signals in overbought conditions. This allows for candlestick investors to take some profits in the higher risk positions that already have produce good profits and move those funds, either to short positions or long positions that are just now showing bullish signals in the oversold condition. This improves the probabilities for producing better profit potential, with less risk.

Our positioning yesterday in TGI was based upon seeing a Fry Pan Bottom breakout going into earnings. Simple logic, candlestick analysis is the graphic depiction of everybody buying and selling during a specific time frame. If there is strong buying going into the close just before an earnings report, logic implies that people, that know what is going to occur in the company’s earnings, are buying. The probabilities will put you in the right position at the right time. The candlestick patterns continue to work well, Fry Pan bottom’s continue to show good profitability

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Investor sentiment is looking for good news! That can be seen in the candlestick charts revealing a steady uptrend in the overall markets with good strength exhibited on good news days. Another announcement of a potential vaccine provides bullish sentiment, anticipating the virus debacle will soon be over. It can be assumed as long as the market indexes continue to trade above the T line and in the up trending channel’s, the uptrend will remain in progress. The longer the indexes continue to trade in a slow uptrend, the investor sentiment will change from expecting a retest of recent lows to anticipating if the markets can reach the high levels before the virus downtrend. Candlestick investors have the advantage of witnessing the strength of individual stocks based upon pattern breakouts. The breakouts become much more potent if the underlying market sentiment is not showing any bearish fears. Currently, the gap up in today’s trading produces better probabilities of the Dow heading for the 200 day moving average. This would imply a few more days of up-trending markets.

Crude oil prices continued to move higher. Having the ability to analyze a commodity provides additional evidence of a sector move. Oil stocks are continuing their up-trends. Simple visual analysis allows investors to participate in the strongest sectors, such as oil stocks as oil prices are recovering. The specialty retail sector has produced some very strong profits. Regional airlines showed good strength today with numerous best friend signal breakouts through resistance levels. Many stocks will move up during a slow up trending market. Knowing the strong bullish signals allows the candlestick investor to take advantage of the sectors/stocks that will show the most strength during an uptrend. Utilizing the T line in conjunction with candlestick signals provides a very high probability trend confirmation indicator. The strong profit combination is the identification of a strong candlestick bullish signal and then maintaining that position as long as it stays above the T line. This dramatically improves an investors profitability.

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The market trend remains with the same characteristics it has been exhibiting for the last two months, oscillating trading, up one day, down the next. Fortunately this is beneficial to the candlestick investor. The overall market trend remains in a slow upward direction, trading in a trading channel. As long as investor sentiment does not show any major reversal, the slow up trending nature, albeit oscillating from one day to the next, provides a much stronger trading environment. Without any evidence of severe selling, the bullish candlestick patterns, such as the fry pan bottom and the J Hook pattern, produce much stronger profitability without the fear of any strong selling in the overall market. Simple candlestick scanning techniques pinpoint which sectors are acting the strongest. Currently, the oil stocks have been moving up steadily with crude oil rebounding backup to the $34 area. Specialty retail stocks have been showing great strength. This week, the weeds stocks started showing strong bullish patterns. Having the visual candlestick evidence of where the most bullish strength is occurring allows investors to concentrate trading funds into the strong price moves.

Being able to identify which sectors are the strongest, the candlestick investor has the opportunity to scan those sectors to see which individual stock charts have the strongest bullish chart patterns. This is putting the stars in alignment. Identifying the bullish candlestick patterns produce two major benefits. First, it identifies with a high degree of probability the direction of a price move and secondly, those price moves will move with much greater strength than merely up-trending price moves in a slow up-trending market. Until there is a dramatic sell signal and a close back below the index T-line’s, it has to be assumed the uptrend remains in progress.

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Today’s positive trading was not unexpected when analyzing candlestick charts. The 50-day moving average illustrated it was acting as support when there was a piercing signal formed in the Dow on Thursday. The NASDAQ bounced off the lower trend channel and eventually closed above the T line on Thursday, then again on Friday. This provided the probabilities that investor sentiment was not ready to sell off the market. Investor sentiment is also easy to evaluate based upon the positive news this morning about the possibilities of a vaccine close to be in developed. Today’s positive trading puts the market conditions well in the middle of the trading channels, the NASDAQ showing much more bullish movement in an up trending channel. This is allowing for numerous candlestick patterns to work very effectively. The J hook patterns have been very profitable. The scoop patterns are setting up for strong slingshot up moves. Simple Candlestick scans find the strong trade set-ups very easily.

NAIL is a strong chart set-up as a scoop pattern breaking up through the 50 day moving average. The gap-up in today’s trading provides a high probability of a strong uptrend with a scoop pattern breakout. The numerous J-hook patterns recently recommended are continuing to show very good profitability. It is simple to maintain these profitable trades. Stay long as long as they close above the T-line. The slow up trending market allows for these type of patterns to perform with much greater upside potential, because there is not any bearish sentiment creating any hesitation in the pattern breakout moves. Utilizing pattern breakouts allows the candlestick investor to take advantage of the uptrend by being in positions that are going to produce much greater profitability than merely up trending stocks during an uptrend.

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The Dow formed a bearish left/right combo on Thursday with a close below the T-line. This was a strong indication that there would be some consolidation/selling, likely to come back and test the 50 day moving average. Today’s trading illustrated the fact that the 50 day moving average appeared to be acting as a support. This did not necessarily mean the downtrend is over, it provides an analysis that might illustrate a slow drifting market trend if the market indexes have a hard time getting back up through the T line. It will be important to see how the markets open tomorrow. A strong bullish day would clearly indicate that most investors the 50 day moving average was going to be a support level. This usually provides bullish confidence, capable of starting another strong uptrend. Today’s bullish trading in the Dow could be considered a piercing signal that used the 50 day moving average as support.

The biotech stocks continue to show very strong up-trends. The medical supply stocks also are showing good strength. Note how APT broke out of a wedge formation on good strength today. This dramatically improves the probabilities of an uptrend starting and a strong uptrend in progress. Having the ability to identify what type of signals or patterns are breaking out through resistance levels provides the candlestick investor with a greater insight into which stock moves are going to have the strongest upside potential. Maintaining long positions during the sideways/drifting market is based on a simple trend factor. As long as the up-trends remain above the T line, the uptrend will remain in progress. Join us this weekend for the two day comprehensive training on candlestick analysis. The multitude of chart analysis produces a completely different and profitable perspective for investors. You will gain valuable insights as to what really moves prices. Click here for more info.

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Good investing,

The Candlestick Forum team.