December 28th Market Direction

Hopefully everybody had a good holiday. The market indexes traded positive Today, probably as a result of the signing of the latest stimulus bill. The Dow and the S&P 500 gapped up and are nudging the upper resistance level. If it breaks through that level, especially with a gap up showing good force, wave three could now be breaking out. This would imply some good strong market move for the final few days of 2020. As demonstrated during this slow/lethargic uptrend, especially in the Dow, the candlestick patterns have produced very good profitability. The fry pan bottom’s and the J-hook patterns have worked extremely well.

Currently, fry pan bottom’s are working well in GP, TCON and POLA. All these charts imply more upside upon positive trading tomorrow. The best friend signal is also illustrating good chart set ups i.e. LVS and YELP. The patterns have produced an exceptionally good trading year. Also, the simple scanning techniques of candlestick analysis identified when sectors were starting to pick up strength and when it was time to start rotating out of those sectors. The electronic vehicle sector still is getting good strength, as illustrated in GP. However, with any sector participation, the candlestick charts/signals reveal which positions remaining strong while other positions in that same sector may not be getting bullish attention. This can be currently witnessed in NIO and LI, NKLA. If you consistently utilize the information built into individual stock positions, an investor can constantly keep the probabilities going in their favor. Once you become confident that candlestick signals and patterns will produce profitable results a high percentage of the time, your investment discipline will start falling into place, keeping your emotions on your trading decision.