The evidence of bullish sentiment was reinforced by the positive trading today that did not let the indexes trade back below the T-line. If you do your own research, you will find the extremely accurate results of a trend upon seeing a candlestick buy signal and a close above the T-line producing excellent probabilities of an uptrend remaining in progress until you see a candlestick sell signal and a close back below the T-line. Last week, the indexes gapped up above the T-line. The Dow consolidated back to the T line over the next few days. Today’s positive trading revealed the Dow could not close below the T-line. Candlestick signals are the graphic depiction of investor sentiment. The T line is a natural/Fibonacci support and resistance level of human nature. When you combine the two, you have an extremely high probability trend indicator. A simple assessment can be made when the indexes are trading above the T line, the uptrend is still in progress.The strength of today’s trading is compounded by the fact that profit-taking occurred during the middle part of the day followed by buying coming back into the close. The uptrend remains in progress, the T line is verified that fact. Continue to stay predominantly long. Note that there are numerous highs of the day occurring in individual stocks going into the close. Investor sentiment is not hard to evaluate based upon the candlestick formations.

PACB can still be bought on positive trading tomorrow, Doji sandwich.

SFIX did not execute today but can still be bought on positive trading tomorrow, frypan bottom breakout confirmation.

DAN stay long, good frypan bottom breakout.

The frypan bottom patterns and the J-hook patterns, two of the most recognizable candlestick patterns, are producing extremely good profits.TSLA has been moving up steadily confirming a frypan bottom pattern, even though the overall market trend has been choppy during that timeframe. Numerous candlestick charts have been producing strong profits during this slow uptrending market coming back up above the T line. The major advantage of utilizing candlestick patterns is twofold. First it produces high probabilities of being in the correct direction and secondly, the magnitude of the move is usually extremely strong profit trades, much stronger than merely uptrending stocks during an uptrend. Will trade talks with China get confirmed? It doesn’t matter! The investor sentiment perceives the future looking better for investments based upon anticipated results as well as all the other factors investors make when making buying or selling decisions. Chat session tonight at 8 PM ET.

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The Candlestick Forum Team

The nature of the overall market trend can sometimes be confusing based upon the day to day trading. Today’s trading formed a bearish Harami, giving the possible indication the buying of Friday had come to an end. Fortunately, for the candlestick investor, the addition of the T-line into the analysis allows for better assessments as to what the overall investor sentiment is doing. The fact that the market indexes continue to trade above the T-line dramatically improves the probabilities the bullish sentiment of the market is back in progress. The combination of candlestick signals and the use of the T-line, the T-line being a natural support and resistance level of human nature, produces a very powerful and accurate evaluation of what a market/price trend will do. The use of the T-line in conjunction with candlestick signals dramatically reduces the prospects of being whipsawed in and out of a position.

A major advantage of candlestick analysis is being able to identify which stocks/sectors are working the strongest or weakest during a market trend. As illustrated in today’s trading, the charts/ETFs related to the biotech sector illustrated money coming into that sector. This allows for pinpointing the strong stocks in that sector. With the supply of over 7800 stock trading entities, candlestick charting techniques allow for identifying very quickly which stocks have the best upside potential. Even when a market trend is in an upward direction, Candlestick investors gain a huge advantages by surpassing merely uptrending stocks during an uptrend but identifying which stocks have the most strongest upside potential. Currently, the assumption is that the market is back in an uptrend now that is trading above the T line. Simple candlestick scanning techniques reveal the biotech sector is gaining inordinate strength. Logic dictates having a few biotech positions in the portfolio.

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The Candlestick Forum Team

The indecisive trend of the markets is more clearly revealed because of the trading formations on a daily basis. Adding the factor of the market indexes trading indecisively below the T line provides a better probability trading strategy for investors. Without a definite direction of the market, the portfolio strategy becomes more oriented toward having both long and short positions in the portfolio. This strategy can be maintained until there is a definite trend indication, such as a bullish candlestick signal and a close backup above the T line, showing the bullish uptrend is back in progress. Fortunately, with simple candlestick scanning techniques, it is very easy to identify strong bullish signals and patterns as well as strong bearish signals and patterns. Logic dictates that no matter which direction the market is moving or not moving, candlestick scanning techniques will always find more bullish and bearish trade set ups than most investors will be able to handle. This produces the opportunity for not only finding good trades, but being able to cultivate the best of those good trades.

Very simple trend analysis techniques allows investors to participate in price movements based upon candlestick signals confirming an existing trend. For example, shorting BYND is based upon recognizing the downtrend of this stock price has been in progress for months. Additionally, witnessing candlestick sell signals at obvious resistance levels reveals investor sentiment is still continuing the downtrend. The same is true for analyzing bullish trends. The T line becomes a very important factor for recognizing the signals/patterns that are going to continue an uptrending move.

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The Candlestick Forum Team

Logical trend assessments can be made when witnessing continuity in all the indexes. Today, the Dow, S&P 500, and the NASDAQ all had the same candlestick indications. They each created sell and closed below the T-line. On days when one index is up and another may be down, the common sense analysis is that there has not been any change of investor sentiment, the trend will usually continue. However, on days when all the indexes are moving in the same direction and as seen in today’s trading, closing below the T line, it is much more evident that there has been a general change of investor sentiment across-the-board. The magnitude of the sell signals today also indicated there had been a change of investor sentiment. This does not necessarily indicate a major reversal of the market indexes but at least it shows there is a higher probability of a pullback/consolidation stage setting up in the markets. This analysis allows option traders to make a much more decisive decision-making process when evaluating individual stock positions that might not be showing excessive weakness, but it does indicate the time factor may be about to reduce the time premium in specific positions.

The T line remains a very strong trend indicator. Individual stock positions that may have shown weakness and close below the T line now have the improved prospects of pulling back. They become positions that may be closed. When the market shows weakness and individual stock positions continue to trade above the T line, this becomes a clear indication that those bullish positions are not being affected by the market.

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The Candlestick Forum Team

The anticipation of the markets continuing higher was illustrated by the indecisive candlestick formations supporting on the T-line. This simple visual analysis allows a candlestick investor to assess the strength of the selling during a pullback/downtrend. Today’s positive trading confirmed the T-line was going to continue to act as a support and illustrated J-hook patterns in the major indexes. The J-hook pattern implies more upside, adding additional evidence the uptrend remains in progress. Because the candlestick signals and patterns are the accumulative buying and selling decisions of investors, having the reason for why the markets are trading higher is not required when doing candlestick analysis. Identifying the reoccurring patterns and price movements is all a candlestick investor needs to interpret. The lack of trade agreements, impeachment hearings, Washington indictments, are not affecting investor decisions. The importance of candlestick analysis is merely evaluating that investors are currently buying.

Price trend analysis can be accurately enhanced by knowing what each individual candlestick signal is revealing during the development of a price pattern. Additionally, the appearance of individual candlestick signals at important support and resistance levels merely reveals to the candlestick investor what the major decisions were made at those levels. As illustrated in our recommendation on ZM, a trend kicker signal, a very strong bullish signal, occurred right at a frypan bottom breakout level which coincided with a 50 day moving average. Identifying a combination of candlestick analysis factors dramatically improves the probabilities of being in the correct direction as well as a strong price move. Analyzing a price move after a breakout situation is much more accurately evaluated based upon simple trend analysis incorporating the T line. Having the ability to analyze the overall market direction dramatically improves the probabilities of being in strong bullish candlestick patterns. The magnitude of the moves of a pattern breakout is much greater than merely holding uptrending stocks during an uptrend.

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The Candlestick Forum Team

The potential consolidation was evidenced when the Dow formed a bearish engulfing signal in Tuesday’s trading. The NASDAQ formed a Doji that day, also providing better evidence of a reversal in the market trend on a lower open after the Doji. The appearance of candlestick signals allows investors to make a much more accurate assessment as to what the overall trend of a move will likely produce based upon the results of individual signals during the trend. When using that information in conjunction with the T line, taking profits can be instigated but now watching to see what the overall markets are doing at the T line level. This makes for a very simple if/then analysis. If the premarket futures indicate a lower market open tomorrow, the likelihood of the continued downtrend is very great. Positive trading tomorrow reveals the T line continuing to act as an uptrending support level.

The T line, acting as a natural support or resistance level of human nature, provides a much better trend analytical decision-making factor based upon the T line rule, an uptrend can be maintained after a bullish candlestick signal and a close above the T line. That trade can stay in progress until you see a candlestick sell signal and a close below the T line. It also allows for much greater profitability when applying the analysis of individual signal confirmation at the T line area.

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The Candlestick Forum Team

The graphics of candlestick signals in conjunction with an extremely accurate trend indicator, the T-line, dramatically reduces emotional stress and decision-making. The logic is built into each individual candlestick formation allows the candlestick investor to much more accurately assess what the investor sentiment is doing during a trend and/or at the reversals of a trend. This could easily be seen when the Dow broke out of the wedge type trading range of the past few months. The breakout candles did not show any hesitancy going through the resistance levels, almost a bullish kicker signal through that level. This indicated there was going to be more upside after it broke out. The information built into each candlestick signal or formation allows for a much more accurate evaluation of what the strength of the next price move will be, whether analyzing the market indexes or an individual stock chart. Logic dictates that if the overall market trend can easily be evaluated, such as a clear indication more upside in the markets is expected based upon the candlestick charts, investing in the strong individual stock charts produces much more profitability by expecting the results of a candlestick pattern breakout to provide big profits without bullish sentiment being diminished by the overall market appearing to head lower. The current market trend has not demonstrated any sell signals nor traded back below the T-line. The assumption remains that the uptrend is still in progress.

The information built into each candlestick signal reveals exactly what is going on in investor sentiment at observable support and resistance levels. The bullish Harami illustrating the selling had stopped in NFLX right at the 50 day moving average support level. The bullish Harami provides an extremely high probability trades set up knowing what the signal illustrated. Having the ability to analyze what the investor sentiment is doing at levels that everybody else’s watching allows the candlestick investor to enter trades much earlier in a profitable trade than other trading strategies. After entry, price patterns and/or the use of the T-line greatly enhances the profitability of a trade.

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The Candlestick Forum Team

Identifying the uptrend in a continuation process is relatively easy utilizing candlestick signals. Price movements that create patterns that are identified by most investors are confirmed more quickly when evaluating the signals that show strength at pattern breakout levels. This was illustrated in a breakout in the Dow, S&P 500, and the NASDAQ when the next wave was confirmed with candlestick bullish signals. Because candlestick signals are the graphic depiction of human nature and the T-line is a natural support and resistance level of investor sentiment, utilizing the combination provides very high probability trend analysis. The current uptrend remains in progress as it is continuing to trade above the T line. The first analysis of profitable trading is identifying the overall trend of the market indexes. This becomes much more accurate when using the information built into candlestick signals and patterns.

All boats rise in a rising tide! However, identifying the candlestick signals and patterns that produce the highest profit trade results allows candlestick investors to make much greater profits knowing that the overall market trend is continuing in a slow uptrend. The best friend signal, the J-hook pattern, and the frypan bottom are just a few of the candlestick patterns that allow for much greater profitability than merely holding stocks that are moving up slowly in a slow uptrend.GH is showing good strength because of a best friend gap up. DXC provides very strong upside profitability based upon a best friend gap up confirming a frypan bottom breakout. Because candlestick patterns produce to results, a high probability of being in a profitable price move and the results of the price moves are much greater when the patterns produce breakouts, the profitability of an overall positioning of the portfolio is dramatically improved. The percentage of correct trades are dramatically improved based upon the high probability results of candlestick signals. Where most investors have decent portfolio returns during an uptrend, due to a majority of stocks moving positive while a few positions are trading negative, the candlestick investor has the benefit of greatly reducing the number of trades in the portfolio trading lower.

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The Candlestick Forum Team

When the market indexes broke out through a resistance level that everybody else could observe, the candlestick investor has the advantage of seeing the bullish signal that was indicating the resistance level was not going to continue to act as resistance. At that point, high probability trend indicators, such as the T-line, continue to confirm that the next wave to the upside was in progress. Although the indexes have had a few days of indecisive trading, profit-taking, the overall trend evaluation is simplified by knowing that as long as the indexes continue to trade above the T-line, the uptrend remains in progress. Having that information allows the candlestick investor to enter trades that have probabilities of creating high profit situations with the underlying factor being there is no major selling pressure in the markets.

The lack of any selling indications provide very profitable trade set ups. Uptrending stocks stimulated by belt hold signals, such as our position in GOSS, dramatically improves the probabilities of not only being in the right direction at the right time but in very strong price moves. Holding steady Eddie positions as illustrated in our recommendations on VSTO and CARB allows for participating in the high profit exuberance at the top of steady price trends. Human nature works the same way time after time. Learning what patterns are created by human nature/investor sentiment puts the candlestick investor in situations where the probabilities are not only extremely strong of being in the right direction at the right time but also establishing positions that will produce excessive profitability.

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Good Investing,

The Candlestick Forum Team

The markets moving to new high territory was not unexpected. Why? Because simple expectations of candlestick signals and patterns provide a good format for anticipating the continuation of a trend. Over the past few weeks the Dow was forming a frypan bottom pattern. The breakout level of the pattern was corresponding with recent market highs. Knowing what to expect coming out of a frypan bottom made the expectation of more upside easy to evaluate. Once the frypan bottom breakout occurred, utilizing the T line as a trend indicator provided additional confirmation that the Bulls were remaining in control. Knowing what to expect from specific signals and patterns allows the candlestick investor to be much more prepared and ready to move aggressively at levels that other investors might have some hesitancy. Candlestick analysis is not based upon the anticipation of results from fundamental information. Candlestick analysis is merely the graphic depiction of what occurs in investor sentiment time after time based upon the interpretation of results from fundamental analysis. This is a much more accurate assessment of what prices will likely do.

Utilizing candlestick patterns in conjunction with the T line keeps investors in profitable trades, reducing the flaws of emotional investment decision-making. The recommendation of staying with VSTO was based upon the lack of any sell signals and a close below the T line. Witnessing pattern setups allows investors to enter stock or option trades at the appropriate time as illustrated by the J-hook pattern set up in Tesla. Strong candlestick buy signals, such as the best friend signal, produces a high probability trade results as well as much better than average profit results. This can be seen in buy signals that were developed in PAYS, implying a big upside potential. Investor sentiment is the most consistent indicator for evaluating price movements. You do not have to be a sophisticated technical analyst to quickly learn the results of candlestick signals and patterns.

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The Candlestick Forum Team