As the first week of trading in December comes to an end, the markets have proven to be what I warned everyone about - volatile and dangerous. The last two days for the major market indices have not been pretty and certainly have done some internal technical damage that I will discuss today.
One thing worth remembering, this is the sixth year of a bull market. In bull market terms, that's an old bull that may be running out of steam.
2015 has been a difficult year for many hedge fund managers as there simply has not been a lot of movement in the overall indices. Based on yesterday's close, the Dow is down 1.94% on the year, the S&P 500 is down 0.45% and the NASDAQ is up 6.37%. This is a very mixed picture and I would not be surprised to see more pressure on these markets in December. I think a lot of money managers may just square up their trading books and wait to look at the markets in 2016. Continue reading "The Markets Could Get Ugly This Month"→
One interesting stock to keep your eye on today is First Solar, Inc. (NASDAQ:FSLR), which broke over a long-term downtrend line in October 2013 and has been moving sideways, but slowly inching upwards nonetheless.
Today's market action in this stock is going to be important because if it closes towards the highs of the day, somewhere around $64.00 as of this writing, a Japanese candlestick "morning star" formation will be created. This can be a strong indication of a reversal to the upside.
I first learned about candlestick charts when I was speaking in Tokyo on the US markets in the late 80's. I was immediately fascinated by this form of charting I had never seen before. It was similar, but so different from the way I was looking at regular Western charts.
What I like about the Japanese candlestick charts is the interesting names they have for them and the patterns that immediately tell you where the market opened and closed for the day.
At MarketClub, when you have a blue candlestick bar, it indicates the market opened lower for the day, then closed higher. When it's a red candlestick bar, it is just the reverse, indicating that the price opened higher, then closed lower for the day. This is very valuable information, information that you can use time and time again.
During my stay in Japan, I learned later that candlestick charting has been around for centuries and it was originally used to chart and track rice prices. Now, this same form of charting is used for practically every traded market in the world today.
Japanese candlestick charts differ from Western charts as they are much more visual and descriptive than Western charts. Besides the more advanced formations on candlestick charts, they also have such interesting names like "hanging man," "hammer," "dark-cloud cover" and "morning doji star." I could go on, but I think you get the picture. The names of these formations are very colorful. Continue reading "Did Tesla Just Make A Classic Candlestick Bottom?"→
Senior Analyst Jeffrey Kennedy is the editor of our Elliott Wave Junctures educational service and is one of our most popular instructors. Jeffrey's primary analytical method is the Elliott Wave Principle, but he also uses several other technical tools to supplement his analysis. In today's lesson, Jeffrey shows you how to use candlestick patterns to identify opportunities.
You can apply these methods across any market and any time frame.