July 8th Market Directions

The summer doldrums! Makes trading much more difficult. However, a huge advantage for utilizing candlestick scanning becomes much more apparent. The simplicity of the visual analysis for strong candlestick signals and patterns enhances the ability to find good trades even when the overall market becomes lethargic. ROKU was recommended today because of the bullish Doji sandwich that broke through the T line on Friday. The results of a Doji sandwich creates a high probability trades set up. QD was recommended based upon the same pattern identification. Most investors overcomplicate trade set up analysis. Candlestick analysis remains very simple. Candlestick signals and patterns are going to produce high probability results because human nature works the same way time after time. The probabilities of being in a correct trade is merely incorporating visual signals and patterns with other visibly recognizable indicators. A candlestick buy signal coming back up through the T line or the 50 day moving average merely reveals that a buy signal is breaching a level that most other investors are watching. The buy signal allows the candlestick investor to be positioned before everybody else starts buying into a position based upon other indicators.

AMZN is a good example of a bullish candlestick signal showing the probabilities of a breakout through a resistance level. A bullish flutter kicker signal indicates a frypan bottom pattern breakout through a perceivable resistance level. This is called convergence analysis or 2+2, simply adding multiple signals and patterns at breakout levels that dramatically improve the probabilities of knowing when to get into a bullish or bearish position. We often state that this is not rocket science, this is merely learning what human nature normally does based upon the signals that have been identified through hundreds of years of analysis.


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

Good Investing,

The Candlestick Forum Team