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Good Investing,

The Candlestick Forum Team

Being long or short during market trends is more of a natural evolution of portfolio management when utilizing candlestick analysis. When the markets are in an uptrend and in the overbought condition, the appearance of candlestick sell signals in the market indexes create the process of changing a portfolio from being predominantly long to being predominantly short. This is not an instant transaction. As the market indexes start to show weakness, individual stock charts will also start showing weakness but not necessarily all at the same time. This creates a natural process for candlestick investors to start taking profits in individual stock price moves that are now showing sell signals. This does not result in any given day a portfolio changes dramatically from long positions to short positions. As each individual stock chart start showing weakness or a sell signal, the natural process is to move money to a short position based upon the confirmation of the market in general. This usually occurs over a multiple day process as the indexes continue to show the direction of the markets.

Is this a bad market? Not if the portfolio was oriented now to the short side. With the markets in oversold conditions, adding new short positions would be a higher risk trade, even though there is no change of the market trend, but sitting in existing short positions is the comfortable strategy. The graphics of candlestick charts provide a powerful analytical tool. It produces the visual analysis of what is occurring in investor sentiment. This allows the candlestick investor to be positioned in the correct direction of the market trend with an extremely high probability.

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

Good Investing,

The Candlestick Forum Team

The trend/nature of the markets are much more easily analyzed when knowing the simple Doji rule and being able to analyze what the character of investor sentiment is revealing on a day to day basis. The current downtrend of the market is pretty well been confirmed due to the fact the market indexes have never been able to get back up above the T-line. There were prospects of a reversal with the NASDAQ and the S&P 500, being in the oversold condition, formed indecisive/Doji type days right off the 200 day moving average. This would have made for a logical bullish reversal based upon identifying bullish confirmation after the indecisive candlestick signals that just touched the 200 day moving average. However, Today’s positive trading did not illustrate a strong bullish reversal. Another day of indecisive trading. The lack of any bullish candle indicated there was not any major change of investor sentiment. It still has to be assumed that as long as the indexes continue to trade below the T-line, the downtrend remains in progress. A lower open tomorrow would create a bearish Doji sandwich in the Dow, indicating a bearish J-hook pattern was in progress. This would lead to wave three to the downside.

In this condition in the markets produces a stage where is just remaining short is the best strategy. Adding new short positions with the markets in the oversold condition produce a higher risk trade. Adding long positions without any major reversal signals doesn’t have a great profit potential based upon not seeing the markets in general stopping their downtrend. Any long positions has needed the lack of candlestick sell signals and closes below the T-line. This is where candlestick patterns, such as frypan bottoms and J-hook patterns produce a viable profit in bullish trades. But the big profit moves are going to be going with the flow, short positions in a downtrend. The simple scanning techniques of candlestick analysis allow investors to find the best bullish or bearish trades in any market conditions in less than 20 minutes each afternoon. Knowing which direction the general market is moving and being able to identify the individual stock chart patterns that are going to produce the best profits dramatically decreases an investors emotions and their trading.

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

Good Investing,

The Candlestick Forum Team

Learning how to utilize candlestick signals effectively is relatively easy. It’s all visual. When did the market indexes start showing bearish sentiment? That can be easily detected by going back and finding the strong candlestick sell signal and a close below the T line. How do you assess what the policies and arguments of Washington DC is going to affect the market trend? You can’t! But candlestick charts reveal how the overall investor sentiment is reacting to different tweets or soundbites coming out of Washington. The major benefit of candlestick analysis is it immediately illustrates what is occurring in the investment sentiment’s of the market trends and/or specific stocks and sectors. The bearish left/right combo in the Dow chart and the close below the T line illustrated a strong change of investor sentiment of the previous uptrend. Candlestick signals have been identified and utilized by Japanese Rice traders over the past few hundred years to show exactly when a trend is starting or ending. The probabilities of analyzing trend movement successfully are dramatically improved knowing how investor sentiment is graphically depicted. Having short positions in the portfolio’s over the past four weeks of trading produced great profits by merely being in the correct direction of the markets trend and stock trends based upon a powerful T-line rule. A candlestick reversal signal and a close below the T-line dramatically increases the probabilities of a downtrend until witnessing a candlestick buy signal and a close above the T-line. This is based upon excessive analysis for many centuries demonstrating the effects of investor sentiment. The short positions have produced very strong profits.

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

Good Investing,

The Candlestick Forum Team

Candlestick analysis provides a very clear visual result at expected technical levels. The Dow formed a bullish Harami signal right at the 200 day moving average with stochastics in the oversold area. Confirmation of the support of the 200 day moving average was evident over yesterday in today’s trading. The ultimate confirmation was investor sentiment closing the indexes backup above the T line. Simply stated, candlestick bullish reversal signals formed in the oversold area at major support levels and then closed above the T-line. This all provides the visual evidence that there has been a major change of the downtrend. Knowing this, candlestick investors can be aggressively buying knowing what to expect after bullish reversal signals appearing in the oversold condition.

Having the ability to analyze what the overall market trend will be doing allows for the appropriate positioning of trades. Witnessing bullish signals forming in the indexes after a strong downtrend prepares an investor to start covering short positions, when bullish signals start appearing in individual stock positions, and start adding bullish positions back to the portfolio. This analysis helps diminish emotional trading. Because the results of candlestick signals produce high probability expectations, the candlestick investor can recognize when the probabilities are going against existing positions and when it is time to establish new positions in the opposite direction. This allows for identifying which candlestick reversal signals and patterns occurring in individual stock prices make for the highest profit trade set ups.

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

Good Investing,

The Candlestick Forum Team

Candlestick formations reveal what is occurring in investor sentiment. However, there will be trends that do not reveal whether the Bulls or the Bears are in control on a day to day/time frame to time frame basis. That is what is occurring in the markets over the past few weeks. Fortunately, candlestick analysis has indicators that let investors sleep well at night. The T-line! The indexes have had whipsaw all reactions to the news coming out of Washington, especially in regards to the China tariff negotiations. How do you trade in these type of market conditions? The final confirmation, the T line. Note that after the indexes formed sell signals and close below the T line a few weeks ago, there has been one obvious factor. There hasn’t been confirmed buying above the T line. Why is this important? A simple candlestick observation! When a trend is trading below the T line, the probabilities are greatly favor a downtrend until there is a candlestick buy signal and a close backup above the T line. An uptrend trading above the T line will continue to remain an uptrend until a candlestick sell signal and a close below the T line is witnessed. This is called the T line rule. It dramatically improves the probabilities for allocating the correct positions in a portfolio.

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

Good Investing,

The Candlestick Forum Team

The Dow closed out 139 points Today. Does that mean the downtrend is still in progress? Candlestick analysis provides much more information based upon the type of candlestick signal produced on any given day. The Dow closed very close to the top of its trading range today, creating a hammer signal. The candlestick formation provides a much more clear analysis of what is occurring in investor sentiment. A hammer signal, forming near the oversold condition, prepares the candlestick investor for a possible reversal. If not a full-scale reversal, possibly a bounce back up to the T line. Add the analysis of the NASDAQ, which opened almost on the 50 day moving average but eventually closed up near the high end of the trading range provides a much different perspective as far as what was occurring between the Bulls and the Bears. The fact that the NASDAQ closed near the top end of its trading range, well above where it opened, better revealed that the Bulls were coming back into the market after the open. For the candlestick investor, the direction of the market will be much better anticipated based upon what type of trading occurs on the open on Friday after bullish indications occurred during today’s trading.

How does candlestick analysis dramatically remove emotional trading most investors are victims? How often does an investor look at their trades/portfolio and wonder why they are still holding positions that are in a downtrend? Candlestick analysis provides insights into when to sell and when to buy based upon common sense candlestick signals and patterns. Unsuccessful investors are usually holding positions in a downtrend with the hope that the bottom is near and their positions will start going positive again. The problem with this scenario is greatly diminished when being able to analyze and react to signals that tell when there has been a change of investor sentiment. Most investors do not react to what the market is telling them, they are still trading their positions based upon what they hope will happen. Candlestick signals are the results of hundreds of years of visual analysis. Trading against high probability reversal signals is not a winning investment strategy. Learn how to use the information built into candlestick signals, and you will always be trading in the high probability trend directions.

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

Good Investing,

The Candlestick Forum Team

The benefits of candlestick graphics allows investors to see immediately what the results are of a big price move on the open. Today, when the indexes opened much lower, it could be seen, especially in the NASDAQ, that the Bulls were stepping right into by. By the end of the day belt hold signals were demonstrated in the Dow and the NASDAQ. The final result was that all the indexes eventually close backup above the T-line. Today’s trading indicated the lack of any follow-through bearish sentiment after the open. The belt hold signals produce visual confirmation that the Bulls were still in control of the markets.

This makes the market trend analysis relatively easy. Positive trading tomorrow would confirm the belt hold signal as well as indicating the indexes were still not going to close below the T-line. If the markets opened lower tomorrow, it obviously reveals the lack of bullish control but today’s trading would indicate lower trading was merely a continuation of consolidation versus a full-scale reversal. This makes the premarket futures tomorrow a very important indicator of the direction of the overall market.

Once again, the benefit of trading candlestick signals and patterns dramatically reduces the prospects of having existing pattern positions producing big losses, if any loss, on a day when the market is trading lower. This can be witnessed in numerous chart patterns, such as the frypan bottom, continuing to produce profitable bullish trades even when the market was selling off or trading lower most of the day. This is based upon a simple observation of human emotions. A candlestick pattern is produced by a build up of investor sentiment, not affected by what is occurring in the overall market trend on a day to day basis.

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

Good Investing,

The Candlestick Forum Team

Today’s selling was signaled by one of the strongest candlestick reversal signals, the bearish left/right combo. The Dow formed a bearish engulfing signal following a Doji yesterday. Additionally, the selling had the indexes closing below the T line. Very simple analysis! A strong candlestick sell signal and a close below the T line gave a high probability the sellers are starting to take control. Although there was some bullish trading early today, the fact that there was a candlestick sell signal provided the probabilities that the sellers are taking control. This cautioned for any bullish transaction on positive trading early in today’s trading. The next analysis is whether this is a major reversal in the market trend or merely consolidation. The indications of consolidation was illustrated by the NASDAQ and the S&P 500 showing indecisive trading days, Doji days. Additionally, the transportation index came back up strong. This would indicate there was not an overall selling consensus in all the market indexes.

Although the indexes traded lower, numerous candlestick patterns continue to trade profitably. Knowing the expected results of candlestick patterns provides the framework for knowing when to stay long or when to close out a position based upon a close that would indicate the pattern was not continuing to perform. This is illustrated by the build up of investor sentiment that creates the pattern in the first place. Knowing the indicators that continue to confirm a trend is still in progress allows a candlestick investor to hold positions that are not being affected by the opposite direction of the overall market.

Chat session tonight at 8 PM ET.

Good Investing,

The Candlestick Forum Team

The visual aspects of candlestick charts allows an investor to easily see what the overall investment nature is of the market trend. Currently, the slow steady uptrend of the market indexes, continuing to trade above the T-line, reveals that there is not yet any great exuberance. The slow steady trend indicates profit-taking along the way, making the uptrend much more solid. This simple assessment can be made by analyzing the nature of each daily candlestick formation. Although the uptrend is very slow, these market environments allow the candlestick investor to scan for the trading patterns that are going to produce much greater profits versus merely slow uptrending stock positions in a slow uptrending market. The result of frypan bottom breakout’s, cradle patterns, scoop patterns and J-hook patterns provide to obvious benefits. First, they illustrate when a high probability trend move is about to occur and the trend is usually much stronger than ordinary uptrending price moves. Additionally, when the markets do have soft days during the uptrend, candlestick patterns usually continue in the uptrending mode because a candlestick pattern is a build up of investor sentiment that does not change immediately even though the daily general market move may be lower.

Identifying the strong patterns is very simple because of the visual aspects. Numerous frypan bottom patterns are in progress. The expected results are much greater profitability’s. Simple money management techniques utilizing candlestick patterns provides a trading platform that produces consistent profits based upon the majority of positions moving in the right direction at the right time, and with good profitability.

Chat session tonight at 8 PM ET.

Good Investing,

The Candlestick Forum Team