February 3rd Market Direction

The market indexes remain in an indecisive stage. Although the markets traded higher today, the Dow and the S&P 500 are still trading below the T line. The NASDAQ formed a bullish Harami and closed just above the T line. The Dow and the S&P 500 also formed bullish Harami’s. This requires a bullish open and bullish trading tomorrow to confirm that the Harami’s indicated the selling had stopped. Until all the indexes can close above the T line, the assumption is the downtrend should still be in progress. Other factors that would imply the lack of any wholesale selling is still seeing in the strength of some of the major traders, TSLA up strong and NFLX showing good strength. This indicates there is not a mass exodus from the markets.

A major trend factor for improving individual stock price evaluation is the T line. Our stock recommendations that did not close below the T line in Friday’s hard selling showed the best bullish movements in today’s trading. This enhances the expectation of price movements remaining positive as long as you do not witness sell signals and a close below the T line. Applying the probabilities of the T line analysis in conjunction with candlestick signals and patterns greatly improves the accuracy of stock price assessments. Analyzing J hook patterns, such as TWLO, is greatly improved when seeing the price supporting on the T line and then starting to move positive again. Wedge breakouts can be better evaluated, such as SPCE, when the breakout has used the T line as a support. An investors probabilities of being in profitable trades improves dramatically when using the combination of candlestick signals and the T line.

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

Good Investing,

The Candlestick Forum Team