The direction of the market has been indecisive for the past three weeks. Yesterday’s trading broke the T line, but as witnessed in the Dow, it supported at the 50-day moving average. Today’s positive trading produced a bullish Harami, indicating the selling has stopped. But this does not mean the buying has started. The stochastics are still in a downward trend and the indexes closed back below the T line. This would imply the markets probably waffling between the T line in the 50-day moving average until the stochastics show oversold. This may take a week or two to complete. However, long positions and short positions can remain intact as long as long positions continue to trade above the T line and short positions continue to close below the T line. The T line is an extremely high probability trend factor.
GME is the spotlight for market commentary this week. The Robin Hood traders have created a short squeeze that has taken the price from $20 a share to where it touched $500 a share after four days of trading. As with other strong price moves that have occurred over the past two weeks, GME uptrend started with a fry pan bottom breakout. This candlestick pattern produces powerful ramifications. The probabilities of a price move heading in the bullish direction are extremely strong coming out of a pattern breakout. Additionally, the magnitude of the price move is usually very strong. When the markets are in an indecisive trading mode, utilizing candlestick pattern breakouts continue to produce good profitability without being affected by the general market direction. This is where the Candlestick Forum RARE program adds more credibility to a price move. It is merely a simple analysis, investigating whatever news item because the breakout of a pattern, to verify the news announcement will warrant more upside potential. As with all candlestick analysis, it is based upon mere common sense. Join us this Saturday, January 30 for a mini spotlight training on how to utilize the RARE program to your advantage. You will get more information than you expect. This 90-minute training session will expose you to a common-sense investment process that will dramatically improve your trading for the rest of your trading career.www.stephenbigalow.com/rare
Chat session tonight at 8 PM ET. Click here to register.
Good investing,
The Candlestick Forum team
