The bearish left/right combo in the NASDAQ is still the relevant sell signal. The Dow has shown selling after the gap up Shooting Star type signal failed at the recent all-time high in the Dow index. The current selling is likely to bring the Dow back down to test the T-line, after moving up excessively away from the T line. This would imply having short positions in the portfolio. At this point, any long positions should have been closed out if they were showing sell signals and signs of weakness, closing below the T line. This shows the relevance of the Japanese rice traders saying “Let the market tell you what the market is doing.” The market does not like indecision. The current political atmosphere and the increase in the virus cases is producing an indecisive outlook for investors.
There still remain some good long positions as long as they stay above the T line. Simple candlestick scanning techniques also identifies good short positions, as in our recommendations to short RUN and CYH. Candlestick charts also reveal when there is not any clear analysis on a charts movement. This is demonstrated by the big traders, AMZN, NVDA, NFLX, TSLA, not showing any decisive trend movement. Simple candlestick logic implies you do not trade these stocks until there is better definable trend movements. The candlestick charts tell you when to buy, when to sell, and when to stay out of a trade. The more visual evidence that you can apply to candlestick signals and patterns, what we call convergence analysis, the higher the probability the trend will perform. Join us on November 21 for a full-day of training on how to utilize convergence analysis to dramatically improve the probabilities of being in the correct trades at the correct time.
Chat session tonight at 8 PM ET.
Good investing,
The Candlestick Forum team.
