5/8/2018 Candlestick and Candelaabra Reversal Patterns Signaled Push To New High

The S&P 100 posted an extreme Low (relatively speaking) in its Price on October 15, 2014. That event was also marked by
contemporaneous Extremes in our Indicators, the combined result being a potent warning of a reversal of trend to the upside.

The warning bore fruit, in that the S&P 100 rose to a new all-time High of 919.52 on November 28, 2014.

The warning initially took the form of two adjacent “Candlestick” individual price bars, one (a “Hammer” pattern) on October 15 and
the second (a “Doji” pattern) the next day, October 16.

The Hammer And The Doji

The eye recognizes these patterns instantly. The “Hammer” pattern, which is considered to have bullish connotations, appears at
the bottom of a substantial price decline. It is characterized by a wide range of total price movement from High to Low, in which the
price range between the Open and the Close is small and is situated at, or very near, the top of the total price range of the price bar.

The “Doji” pattern can appear either at the top of a substantial price advance or at the bottom of a substantial price decline. In this
instance, the latter was the case. The “Doji” Candlestick price bar is characterized by an Open and a Close which are the same, or
very nearly so, which is understood as evidence of “indecision.” When a “Doji” appears at the bottom of a substantial price decline, it
is considered to have bullish connotations.

In this instance the appearance of a “Hammer” and a “Doji” situated side-by-side, at the bottom of a substantial price decline, was
considered to be “double-barreled” – that is, a very bullish warning of a probable reversal of trend from Down to Up.

This first chart, below, demonstrates that the very bullish warning was amply fulfilled.

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5/8/2018 Candlestick and Candelaabra Reversal Patterns Signaled Push To New High

“Candelaabra” technical analysis impresses upon “Candlesticks” the additional knowledge which is gained from an understanding
that contemporaneous Extremes in Price and in certain Indicators, as displayed on the “Trade Navigator”© platform, are accurate
predictors of an imminent change of trend.

The Crimp And The Blimp

This second chart (below) of the S&P 100 reflects the same events (in point of time) as the first chart. Here, we see that Prices were
at an Extreme Low; at the same time, the “Stoch K” Indicator was also at an Extreme Low, as was the “Bollinger Percent B” Indicator;
there was a “Crimp” (or “closeness”) between the “Bollinger Percent B” Indicator and the “Chandelle 1” Indicator; and there was a
“Blimp” (or “wideness”) between Indicators “Chandelle 1” and “Chandelle 2.”

The eye sees this overall picture, and the brain recognizes the contemporaneous Extreme readings of Price and of Indicators as a
call for a trend reversal to the upside.

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5/8/2018 Candlestick and Candelaabra Reversal Patterns Signaled Push To New High

“Candelaabra” uses a second set of Indicators to act as a “cross-check” of the information gained from an analysis of the purely
“Candlesticks” trend-reversal-warning display as shown on the first chart and of the contemporaneous Extreme readings of Price and
of certain Indicators as shown on the second chart, again searching in this second set for contemporaneous Extreme readings.

The Large Blimp

This third chart (below) again shows the Extreme Low in Price, a very large “Blimp” between the “ADX/ADXR” Indicator and the
“Stochastic” Indicator, as well as an Extreme Low in the “RSI” Indicator. This information is strongly bullish.

The “Candlesticks” information alone, as depicted on the first chart (i.e., the side-by-side “Hammer” and “Doji” that appeared at the
bottom of an established downtrend) offered good reason to believe that a trend reversal to the upside was imminent.

The “Candelaabra” information, as depicted on the second and third charts, strongly corroborated the purely “Candlestick”
information depicted on the first chart.

The bottom line is this: The impression (or overlay) of “Candelaabra” technical analysis upon purely “Candlestick” information can act
as a powerful corroboration of “Candlestick” trend-reversal-warning patterns, leading directly to a higher probability of outcome and
to enhanced certitude when it’s time to make a trading decision.

Posted in Indicators, TradingTagged candlesticks, indicators, trading

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