Investment Newsletter

Investment Newsletter

Japanese Candlesticks Technical Analysis

This Investment Newsletter is powered by CandleWave’s candelaabra© Technical Analysis System for use with the Trade Navigator© platform, a product of Genesis Financial Technologies, Inc. Japanese Candlestick price charting analysis is an integral component of candelaabra.

Wednesday evening, May 7, 2008

Our new Article about bearish Candlestick signals in Merrill Lynch as far back as February 2007 has been published by Ezine Articles under the heading “Investing/Stocks” at http://ezinearticles.com/?id=1153569

A. The Indexes

STAND FAST. STAY SHORT. THE MARKETS APPEAR TO HAVE TOPPED AND REVERSED, BACK TO THE UNDERLYING DOWNTREND.

MAINTAIN YOUR PROTECTIVE BUY-STOPS.

WATCH THE PROGRESS OF CRUDE OIL CLOSELY NOW. IT HAS BEEN A TREMENDOUS WINNER FOR OUR SUBSCRIBERS. DON’T ALLOW PROFIT TO SLIP AWAY.

KEEP MOST OF YOUR LIQUID ASSETS IN THE FORM OF CASH, IN THE SAFEST SANCTUARIES YOU CAN FIND. IN THE USA, FDIC-INSURED BANK ACCOUNTS AND US TREASURY BILLS ARE GOOD CHOICES.

Price action as shown on the Dow Industrials and S&P 500 ten-minute charts today looks a lot like the stairs in the house where I grew up. Step, step, step, relentless, and Dad made us wax them twice a month. Well, there was no “waxing” going on in the stock market today; it was all “waning.”

My guess is that the bullish fever has broken. On the Industrials’ way to a 206-point loss today, its bar on the Daily chart was a tall black bearish Candle. That pattern was duplicated throughout the Indexes. Our favorite Indicators confirm the bearishness. The multiple bearish Candlestick patterns and the looks of the Indicators which I mentioned on Monday evening appear to have borne fruit today.

My recommendation that you “pounce on the bounce” with a modest addition to your Short position (whichever form it may take) seems to have been justified. Granted, one day does not make a trend; but the signals are quite compelling. The odds are tilted in the direction of thinking that the bear market has resumed. Odds only, not a guarantee; but the signals were so strong and universal today that our level of confidence is quite high in saying that we have probably just seen a top.

What happened across the board today also reinforces our standing conviction that the Candlesticks are reliable predictors of reversals. We could not do our work without them.

B. Gold

I can’t foretell the immediate direction for Gold. The bounce may not be over. By rights, it ought to rise a bit more before reverting to its main underlying trend, which is Down. Stay Short and mind your protective buy-stops.

C. Silver

Silver is in the same situation as Gold. Stay Short and mind your protective buy-stops.

D. Crude Oil

Up another $1.69 today. All praise to the Candlesticks and to the Morning Star pattern! This has been a ten-strike. Maintain your Longs or Calls. Crude is overbought. It may not turn down right away, but it should happen soon. Consider elevating your safety sell-stops underneath your Long contracts or Calls. Also consider acquiring a Put.

Paid Subscribers may Press Here in order to link to the Login page for SPECIFIC buy-sell-hold position recommendations.

Always use protective stops. Always. No exceptions.

When you purchase options, always buy them in two’s, or in units of two.

When the trend changes, CandleWave will change with it. When the eminent economist and investor John Maynard Keynes was criticized for changing his mind, he replied “When the facts change, I change my mind. What do you do, Sir?”

INVESTORS’ BIGGEST MISTAKE

Investors’ biggest mistake is Staying Too Long At The Fair, hoping against hope that the Fair will reopen tomorrow, the day after, or next week. But the Bull Fair is almost certainly dead. The facts have changed. Have you changed your mind? What do you do, Sir? What are you going to do now? Are you……

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