Weekly Watchlist November 21st – November 25th

A Santa Claus rally? That is the anticipation every year going into the holidays. The Santa Claus rally is usually expected because of the high percentage of the time in the past it has occurred. What does that mean for the candlestick investor? Candlestick charts will provide much more clarity as to whether a Santa Claus rally is likely to occur, and then confirm whether the rally is or is not occurring. This is based upon simple visual analysis. Our the market indexes showing bullish confirmation, trading above the T line? There are numerous adages as far as market trends. Such as “sell in May and go away”, or expectations produced by seasonality results, price movements that usually occur at the same times year after year. The candlestick investor has a huge advantage because of the actual visual results built into candlestick charts. Currently, the Dow is demonstrating an uptrending bias based upon the bobble breakout pattern at the 200 day moving average, followed by the T line producing confirmation the uptrend is in progress. However, the NASDAQ is not showing the same bullish resiliency. Although the NASDAQ is trading above the T line, the candlestick formations reveal a different story as far as investor sentiment. The trajectory is flat and the dark candles reveal selling pressure versus bullish sentiment. This creates a much better trade evaluation for specific stock/sectors. There are some sectors moving positive while other sectors are showing bearish bias. These market conditions allow an investor to have both long and short positions on at the same time. Fortunately, simple scanning techniques allow for identifying which sectors have the prospects of trading bullish while also identifying which sectors have strong bearish trends. This then allows for identifying which stocks in those sectors have the prospects of producing the strongest bullish or bearish price moves. Join us Tuesday night for the Candlestick Forum chat session demonstrating how to identify the strongest potential bullish sectors and the strongest bearish sectors going into the holiday season.