The rhetorical question, why is the market moving up when the number of virus cases appears to be skyrocketing? The candlestick investor does not have to know the answer to that question. The candlestick investor is merely interested in what everybody else’s investment decision is doing. Apparently investors are looking past the virus crisis or the escalating virus reports is not the relevant number being evaluated, the number of deaths reducing may be the primary factor. Remember, investors are putting their money on the line based upon what they feel the prospects are for the future. That often means disregarding or taking into consideration what current situations are demonstrating.

A major underlying strength of this market trend is its lack of excessive/exuberant buying. The NASDAQ is trading at an all-time high but it was a long steady recovery from the March bottom. The Dow and S&P 500 have shown slow steady uptrends, not revealing any excessive buying. These market conditions have allowed for the identification of candlestick signals and patterns that produce high probability trades setups. The pattern breakouts also imply much stronger price moves than merely up trending stocks during a slow up-trending market. Watch the chemicals, Internet servers, and education and training stocks this week. They have produced observable candlestick breakout patterns.

There are two very effective candlestick rules that produce extremely high probability trades. The T-line rule simply states that a trend has an extremely high probability of producing an uptrend if prices close above the T-line. If prices close below the T-line, the probabilities are extremely strong a downtrend will be in progress. The Doji rule simply states that prices will usually move in the direction of how prices open after a Doji. This easily produces very profitable trades when combining the overall market trend analysis along with individual stock price analysis. Adding short positions to the portfolio had been recommended for the past couple of days based upon the sell signals that had formed in the indexes. The Doji rule helped identify which stock positions to short immediately on a lower open based upon the set up of bearish Doji sandwich signals. With the market indexes trading below the T-line, the prognosis remains strong for more downside.

Although the Dow continues to trade flat/sideways, the NASDAQ has consistently provided a slow up trending trajectory, remaining above the T-line. The lack of any selling pressure allows for the candlestick patterns to perform excessively well without any indication of any bearish sentiment affecting the current market trend. This has allowed for some big profits to occur in both fry pan bottom patterns as well as J-hook patterns. Sector strength is revealed in the biotech area. LABU has indicated strength in that sector. IMMU, CODX, and DVAX are providing strong bullish signals in the biotech sector. As long as the NASDAQ continues to trade above the T line, even though the Dow and S&P 500 are drifting sideways, it has to be assumed there is no major change of investor sentiment, the slow up trending market trajectory remains in progress. This allows the candlestick investor to take advantage of the strong price patterns that are performing in these market conditions.

The expected profit-taking was indicated with a bearish Harami forming in the Dow this past week. The expectation was at least a pullback to the T-line, prompting taking profits in some of the long positions that were starting to show weakness. Was the magnitude of Thursday selling expected? Definitely not, but the prior candlestick signals indicated closing out some long positions prior to that big downdraft. Friday, the Dow formed a Doji/Harami signal. This will make how the market opens on Monday very important. Remember the Doji rule. The trend will usually move in the direction of how prices open after a Doji. The oil stocks, airlines, and specialty retailers showed strong reversals on Friday after their pullbacks. They can be bought if the market appears to be opening bullish on Monday, provided the stocks are opening with bullish confirmation. If the premarket futures indicate any weaker open, be ready to execute the short recommendations posted in the member’s area. Mark your calendars, June 20 will be an expanded training on identifying strong breakout price moves with candlestick analysis, with the application of the trading methods that will maximize your profitability on those breakout moves.

The surprise positive employment numbers allowed the Dow to break through the 200-day moving average. Thursday, a Doji formed in the Dow, just below the 200 day moving average, making the trading for Friday very simple. The Doji rule indicated if the markets opened positive on Friday, the 200-day moving average was not going to act as resistance. A lower open on Friday would’ve implied expecting a few days of consolidation/profit-taking. The strength of the buying on Friday providing some good bullish signals in specific sectors. Crude oil is now trading back up over $40 a barrel. Numerous oil stocks gapped up through resistance levels and can still be bought. The homebuilder sector is a strong viable sector for scanning for strong charts. PHM can be bought on positive trading creating a bullish Doji sandwich confirming a bobble breakout pattern, providing extremely high probabilities of wave three moving the price much higher.



One thing that should be noticed, the sectors that were already acting strong over the past few weeks showed an inordinate amount of strength with the strong buying on Friday. This allows the candlestick investor to concentrate on identifying the strongest stocks performing in the strongest sectors. The expectation is still more upside as the economy opens back up. The advantage of candlestick scanning techniques allows investors to identify which sectors are going to be the strongest during the uptrend.

Identifying and utilizing candlestick patterns produce two major advantages for investors. A candlestick pattern creates an extremely high probability of being in a trade moving in the correct direction and the magnitude of the move will be much greater than a mere up trending price during an up trending market. There are numerous J-hook patterns setting up heading into this coming week. Simple scanning techniques allows the candlestick investor to identify the J Hook pattern which has much better prospects of not only producing a profitable trade, but a much more profitable trades than merely up trending stocks during a slow up trending market.

The markets are currently trading in a trading channel, the Dow and S&P 500 are trading sideways while the NASDAQ is still in a slow upward trading channel. This makes for very profitable trading for the candlestick investor. It allows for simple candlestick scanning techniques that pinpoint the strongest sectors. Then he sector can be scanned to find the strongest individual stock chart patterns. This is basically putting all the stars in alignment. Obviously, investor sentiment keeps getting stronger with the expectations that the virus lockdown is eventually going to be released, letting the US economy get back to the conditions prior to the virus. Numerous sectors are producing some very good profits. Crude oil has produced a strong upward price move, making the oil stocks sector a strong profit area. Biotech stocks continue to produce good profits. Specialty retailers are still moving up strong. This coming week, anticipate application software companies to produce powerful moves. The advantage of candlestick analysis is that it allows investors to have funds in stock/sectors that are going to produce high probability, high-profit trade setups.

The candlestick signals showed the 50 day moving average to be a support level for the Dow this week. The NASDAQ shows support at the bottom of its up trending channel and close back up above the T-line. Numerous sectors are still remaining strong. The Biotech’s and the mining stocks have been showing great strength during this slow market uptrend. Specialty retailers are showing good strong bullish patterns. As long as the market indexes stay in this slow steady uptrend, the strong candlestick patterns will continue to perform with good strength, without the prospect of any major selling putting a damper on the bullish sentiment in the strong sectors. The market trend is slow based upon the whipsaw action on a day-to-day basis, based upon the news and tweets coming out of Washington in relation to when the US economy will be allowed to open back up. Stay with the strong sectors.

The markets continue their uptrends, easily evaluated with the candlestick signals demonstrating the bottom of the trend channel continues to act as a support level and the indexes continue trading above the T-line. Although the uptrend may not be dramatic, it allows Candlestick investors to scan for the strongest stock/sectors during the uptrend. Numerous J-Hook patterns are producing very strong profits. Candlestick patterns work even more effectively when knowing the overall market trend is not showing any dramatic selling pressure. The Biotech stocks continue to act well. Gold and silver mining stocks continue their consistent uptrend. This week, auto parts and retail stocks are likely to produce strong price moves based upon J-hook pattern formations. You may want to join us this coming weekend for a two-day full comprehensive training on candlestick analysis. When you are presented with the signals and patterns, in a chronological order, you gain a clear understanding of identifying how profitable trades are based upon human nature. You will learn what the investor psychology was that created those signals. With this combination, you gain the same valuable insights into price movements as investors that have been trading in the markets for 40 or 50 years. Join us next weekend, you will not be disappointed. Click here for more info.

The markets showed a potential reversal late this week. The Dow appears to be in the middle of a trend channel, with the implication there may be a few more days to the downside before hitting the bottom of the trend channel. The NASDAQ was even more bearish, forming a bearish best friend signal, a Doji followed by a gap down. Expect a few more days at least of consolidation. However, the prospects of a major reversal is not yet confirmed until there is evidence of breaching the lower side of the trend channel. Until there is definite confirmation the bottom of the trend channel is not going to hold, assume the slow upward channel is in progress. Have both long and short positions in the portfolio.

The gold and silver mining stocks continue to show good strength. As long as they continue to trade above the T-line, they can be maintained or added to the portfolio, GOLD, MAG, CCJ. The toy companies such as HAS and MAT showed very strong sell signals, bearish left-right combo’s and bearish McMuffin signals. They can be shorted on weakness this week. Regional airlines also showed some strong sell signals,SKYW, AAL, RYAAY. With the market indexes in the middle of a trend channel, likely to head lower to test the lower end of the trend channel, any long positions should have very compelling strength to maintain the trades. Adding a few short positions to the portfolio would be prudent.