Are you like most investors, that seem to get whipsawed out of a positions when things do not look good? Fortunately, candlestick analysis greatly reduces emotional decision making. Today, the Dow traded higher on the open. But the fear factor of the inverted yield curve, short-term bonds producing a higher yield than longer-term bonds, promotes the possibility of a recession. After trading positive in early trading, the indexes started trading lower. This usually knocks out the week traders. Because candlestick analysis utilizes visual indicators, the T line provides a very significant trend indication. Utilizing the simple T line rule, the uptrend remains in progress until witnessing a sell signal and a close below the T line keeps the candlestick investor from panic selling at the wrong times. Note today’s trading in the Dow bounced off the T line and started to move back up. The reason this is significant is that the T line is used by an in an orderly small percentage of all investors, so small that it should be categorized as nobody uses the T line. That means it is not be in watched as a potential target. When prices support and resist as often as they do at the T line, it provides additional confirmation of the graphics of investor sentiment, candlestick signals, with the T line’s natural support and resistance level of human nature.

Utilizing the T line as a trend indicator allows the candlestick investor to keep from getting scared out of positions. The simple trading rule is that as long as there is not a candlestick reversal signal and a close below the T line, and uptrend remains in progress. Add the factor that the market indexes have produced strong bullish signals over the past week of trading allows for waiting to the end of the day to make any major decisions about closing out positions. Candlestick patterns are the product of human nature reacting the same way time after time. As illustrated in our recommendation on CBLK, identifying the potential scoop pattern, created by a MorningStar signal right on the T line, dramatically increases the probabilities that confirmation of the MorningStar signal will produce the expected scoop pattern breakout. This analysis is based upon centuries of trend move observations. Having the ability to identify high probability trades set ups allows the candlestick investor to constantly have positions oriented toward the correct direction as well as establishing option trades that have high probability/high profit potential.

Chat session tonight at 8 PM ET with Guest Speaker Troy Epperson. Click here to register. 

Good Investing,

The Candlestick Forum Team

The visual results of candlestick charts produce beneficial trade executions. This is due to to the expectation of what a price move should do with a high degree of probability after the appearance of a candlestick signal. The indexes produced MorningStar signals on Friday, positive trading after a Doji in the oversold areas. The Dow produce greater expectations when the MorningStar signal occurred right off the 200 day moving average. Knowing what to expect, based upon a candlestick reversal signal and its location in the oversold area, allows candlestick investors to move aggressively when the signals confirm. This produces the ability to move quickly based upon knowing what to expect as far as confirmation of a reversal signal. Witnessing the premarket futures showing a positive open today after the MorningStar signals in the indexes on Friday had the candlestick investor prepared to buy individual stock positions that were showing strong bullish confirmation immediately on the open.

Expecting confirmation of the indexes allows for taking advantage of chart patterns that are going to be confirming based upon the lack of any major change in the overall market indexes. Today ,NVDA gapped up on the open. Most investors are usually hesitant about buying into excessive price moves. However, knowing that a positive open would have created a bullish flutter kicker allows for very profitable trades by moving immediately on the confirmation of that signal set up. The same high probability analysis was applied to MU. When it opened positive, it not only was confirming the MorningStar signal off the T line, it was also demonstrating a J-hook pattern set up potential. This is what is considered 2 plus 2 analysis, witnessing what the individual signals are doing that are going to confirm a high profit pattern. This is not rocket science, this is merely identifying the same patterns that human nature provides century after century. Candlestick analysis is merely learning to identify what same human nature patterns will be forming. Because human nature works the same way time after time, candlestick analysis constantly puts investors in high probability trades set ups.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

The market had remain in a very indecisive mode due mainly to tweets and interest rate expectations. But fortunately for candlestick investors there is still very simple trend criteria that allow to make a trend assessment. As witnessed in the Dow, after the bearish left right combo at the T-line, the market started showing support with bullish candlestick signals at the 200 day moving average. A reversal or a bounce? That was easily identified when the indexes could not reach the T-line. This provided the expectation that the Bulls had not yet taken control. As seen over the past seven trading days, there was no continuity in a trend, daily oscillations. But the most revealing criteria remained that the markets could not show a bullish reversal signal and a close above the T line. Although the downtrend seems to be prevalent, the formation of of a bearish J-hook pattern, the Dow is currently trading at the 200 day moving average, a possible support level. It will be important to see how they open the markets tomorrow, revealing the 200 day moving average is going to act as support on a positive open or whether a bearish Doji sandwich demonstrates more downside on a lower open. The advantage of candlestick analysis is knowing what type of signals and patterns will be formed based upon the results of individual signals.

With the market moving dramatically up one day and down the next day, it is obviously very difficult to trade. That provides two obvious trading strategies. First, if the market and individual stock price movement is not showing any consistent direction, there are times when it is much better to sit in cash until a direction can be identified. Or secondly, any positions should have very relevant pattern confirmations to offset the effect of outside influences. Pattern breakouts or very powerful candlestick signals as revealed in TSLA and TLRY provide higher probability price moves that will overcome an oscillating general market.TLRY short recommendation was based upon a very strong bearish kicker signal. TSLA short recommendation was based upon a wedge breakout to the downside. The information built into candlestick signals allow the candlestick investor to take advantage of the most powerful trend movements.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team

What is the buying of last week in the market indexes a bounce or a full-scale reversal? The candlestick signal, the Harami, make that much more easy to assess. Friday’s trading created a bearish Harami and all the major indexes. What was more telling was the fact that those bearish Harami’s occurred right at obvious resistance levels, the T line and/or the 50 day moving average. That made the analysis of whether the markets had a bounce or a full-scale reversal much more identifiable. Today’s premarket futures/lower trading confirmed the bearish Harami signal. The failure to get up through the resistance levels following a candlestick reversal signal made it much more clear that the bounce came up to the resistance levels and continue to sell off from there. Knowing what the results of each candlestick signal illustrates allows the candlestick investor to be ready to move in and out of positions with much greater speed and accuracy.

The T-line is a very relevant trend indicator. As indicated in our short recommendation on TX, the lack of any buy signal and the continued trading below the T-line provided a very simple trading strategy, stay short until the appearance of a buy signal and a close backup above the T-line. Note how a bearish left/right combo signal, a Doji followed by a bearish engulfing signal, that formed in mid July started the downtrend. The strength of a left/right combo provides very high probabilities of a reversal in spite of the overall market direction. The recommendation of AERI was based upon a bullish left/right signal up through the T-line showing a dramatic change of investor sentiment/trend. Utilizing the information built into candlestick signals allows investors to see immediately what is occurring in investor sentiment and what signals/patterns will develop from that level.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

Where do you grab for the falling knife? The candlestick signals that appeared in the market indexes last week, bullish Harami’s telling us the selling had stopped and the hammer signals also showing reversals, were confirmed with bullish trading today. The indexes came back up to the first logical target, the T line, as well as 50 day moving averages. The appearance of the bullish signals followed by bullish confirmation provided high probability that a bottom has been reached and the knee-jerk reaction of the Chinese trade wars has diminished. Numerous individual stock charts were also showing bullish reversal signals on very observable support levels. It is this visual information that produces entry levels at high probability levels.

The bullish left/right combo was evident in the TSLA chart. Add the prospects that everybody was buying at the 50 day moving average support level dramatically improves the probabilities that this was a strong buy. Knowing when the markets are showing a change of investor sentiment makes the probabilities of pattern breakouts, such as the scoop pattern identified in our recommendation on PTLA, greatly improving the prospects of not only having a bullish trade but a very profitable bullish trade. A scoop pattern breakout usually produces a high profit move. Identifying the reversals in the major market indexes allows for scanning and executing high profit individual candlestick signals.

Chat session tonight with Steven Brooks. Click here to register.

Good Investing,

The Candlestick Forum Team

Today’s trading illustrates why having stop losses at logical candlestick levels produces much safer trade positions. Candlestick signals are created based upon where they opened and where they close. As witnessed in today’s trading, numerous stock positions opened and traded positive. But when the tariff tweak occurred, many bullish charts became bearish charts as prices moved back down through open prices. The candlestick investor can identify that a bearish signal is more likely to occur when a bullish candle trades back through the open and is now creating a bearish reversal signal. Not only do candlestick signals and patterns reveal when high profit trade set ups are occurring, they also clearly indicate when those trades set ups have not confirmed.

Can all announcements be predicted? Definitely not, making the logic of candlestick formations very simple. A candlestick formation is based upon an open and a close. After yesterday’s hard selling in the markets, investor sentiment had broken the sideways trading mode of the markets that had been established for the past four weeks. The benefit created by candlestick charts reveals the direction of trends because of investor sentiment. Had today’s tweak occurred during a strong uptrend, the result may have been very minimal. The fact that bearish sentiment had taken over the previous day made the magnitude of today’s announcement more powerful on the bearish side. Because of the simple scanning techniques for finding both long and short trades, candlestick analysis makes it logical to have both long and short positions in the portfolio. Sometimes the majority of the positions will be on the long side while other market conditions make having the portfolio oriented to the short side much more logical. But having a mixture of long and short positions, based upon the probabilities that numerous short positions will work profitably in an uptrend as well as long positions will work well in a downtrend. The probabilities of being in a correct trade at the correct time is dramatically improved with very simple scanning techniques.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team

Although the markets appear to be in the summer doldrums, the benefit of simple candlestick scanning techniques allow investors is still make excessive profits in a lethargic market. This is merely a process of scanning for the strongest bullish or bearish charts. Once they are identified, the added confirmation of those strong patterns continuing to work is the lack of any major change of investor sentiment in the overall market. This is a numbers probability! With over 10,000 trading entities, scans can identify the strongest changes of investor sentiment in specific stocks or sectors. Once they are identified, the continuation of a price trend can be easily confirmed using relevant indicators that reveal a price trend is still moving in the correct direction. Candlestick signals and patterns are the graphic depiction of human nature, the impetus for price movements. The T-line is a natural support and resistance level of human nature. Utilizing both the signals and patterns with the confirmation of a trend with the T-line produces an extremely powerful and high probability trading platform.

The patterns have expected results. The signals have expected results. OSTK continues to move in a bullish direction based upon witnessing the classic pattern, a frypan bottom followed by a J-hook pattern. The major benefit of utilizing the candlestick signals and patterns is the expected results based upon hundreds of years of observations. The same scenario was applied to the recommendation of AZUL, a scoop pattern that was set up with a best friend signal, a Doji followed by a gap up. When you apply the information built into each individual signal to a pattern set up, an investor dramatically improves their probabilities of being in a correct trade at the correct time as well as a very powerful price move set up. An investor does not need to be a sophisticated technical analyst to utilize the information built into a candlestick chart. Knowing what each individual signal illustrates about investor sentiment produces a very powerful analytical platform for establishing profitable trades.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

Which direction is the market moving from here? When using a very simple combination to demonstrate when an uptrend may be reversing, it makes the analysis very simple. The combination is witnessing a candlestick sell signal and a close below the T-line. Today’s trading produced a sell signal in the Dow, a bearish Doji/Harami followed by Today’s trading which close the Dow below the T-line. The NASDAQ, S&P 500, and the transportation index all formed a bearish Harami’s but closed above the T-line. This allows the candlestick investor to be ready to close positions based upon very simple analysis. If the markets trade lower tomorrow, confirming the bearish Harami’s and taking the indexes down through the T line, at the same time the Dow is already trading below the T-line, it becomes a high probability evaluation that the sellers are taking control. A positive open and positive trading in the markets? That would clearly indicate the T-line is still acting as a support level. Do these market conditions indicate which way the market is going to move from here? No, but additional information from the current graphics of the candlestick charts produce the information that investors can make high probability trade decisions.

Although the overall market is trading in decisively, simple candlestick scanning techniques allow investors to see which patterns are currently working well. The frypan bottom and the bobble breakout patterns not only reveal high probability trades set ups, but they also produce expected results in spite of what the overall market direction is indicating. Utilizing candlestick patterns is taking advantage of the information that has build up that pattern with investor sentiment accumulating strength that is not immediately altered by a change of direction in the overall market. This produces three beneficial results. First, it indicates the direction of a trade with a high degree of probability. Secondly, the strength/magnitude of the trade is much more profitable than merely trending stocks that are trending in the direction of the market trend. Third, if the overall market direction changes, a candlestick pattern will usually allow for exiting the trade profitably a day or two after the market has changed the direction. Learning how to utilize investor sentiment, the formation of candlestick charts, produces huge advantages for making profitable trades.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team

Is there a new dynamic in this market? Investors have many perceptions about what to do when a trend/price makes new highs. Many investors will decide to take profits. Why? Because prices are a new highs! Candlestick analysis makes a more logical evaluation. Over the past couple weeks of trading, when the markets finally broke out into new high territory, candlestick patterns provided a much different perspective. The movement of the markets into new high territory was based upon a J-hook pattern breaking up through the resistance level of the past 18 months. The J-hook pattern revealed a much more logical assessment of what was occurring in investor sentiment. The results of a J-hook pattern wave three can be easily calculated. It is going to be approximately the same magnitude as wave one of a J-hook pattern. The fact that the markets broke out into new territory based upon a recognizable pattern was more solid evidence that the buying was not a spike breakout but more calculated buying. This provides much stronger evidence that trading in new high territory was calculated, not emotional. The market uptrend, illustrated with candlestick patterns, may be showing a long-term trend, wave three, starting for an extensive bullish move.

The current trend of the market continues to utilize the T-line as a support level. Although the markets have broken out into new high territory, candlestick trend evaluations can be applied to the daily trading of the markets. The T-line, acting as a support level, reveals bullish sentiment is still in progress. Although the trend of the market itself is not aggressively bullish, the lack of any selling pressure allows strong individual candlestick stock charts to continue profitable trading. Bobble breakout’s are producing excellent profits as seen in the Micron trade. A bobble breakout is easily entered upon simple visual confirmation. WDC is in the process of forming the same bobble breakout potential. The advantage of utilizing candlestick patterns is twofold. First it shows the exact entry points and secondly, the results of a pattern breakout usually produces much greater profitability than merely uptrending stocks during a market uptrend.

We will conduct a “Members Only” chat session tonight at 8:00 pm EST.

Good Investing,

The Candlestick Forum Team

Candlestick analysis provides a completely common sense perspective of what price movements will be doing, It does not rely upon projections of which stocks/sectors are going to move bullish or bearish and then waiting to see if those projections are correct. Candlestick analysis is the immediate graphic evaluation of which stocks and sectors are getting bullish or bearish sentiment. This is been illustrated during the current market trend. Although the slow uptrend of the indexes has experienced an oscillating trend movement, specific sectors have clearly shown strong bullish or bearish trend movement. Gold and silver stocks have been exhibiting strong bullish charts, correlating with the strong bullish commodity charts of gold and silver. Crude oil stocks have produced good short trades corresponding with the strong current downtrend of crude oil. Producing consistent profits is not a difficult process when using candlestick analysis. It is merely learning the signals and patterns that are created by reoccurring human nature investment decision-making.

Recognizing the strong chart patterns produces two basic results. First, it puts investment funds in the correct direction of a price move and secondly, the price moves are usually inordinately strong. A slow uptrend in the overall market creates slow uptrending price moves in most individual stocks. Taking advantage of the information built into candlestick patterns allows for producing inordinate profits during that same market price move. Currently numerous frypan bottom breakout’s and J-hook pattern breakouts are creating big profits. Once an investor learns a simple techniques for analyzing the overall market trend, they produce the opportunity to make big gains in candlestick chart patterns that are corresponding with the overall market trend. Simply stated, candlestick analysis puts investment funds into the appropriate positions with a high degree of probability.

Chat session tonight at 8 PM ET. Click here to register.

Good Investing,

The Candlestick Forum Team