NYSE - New York Stock Exchange
The New York Stock Exchange (NYSE) is the largest and the oldest stock exchange in the United States. Located on Wall Street this exchange can be traced all the way back to 1792. This exchange trades approximately 1.46 billion shares each day including stocks for some 2,800 companies as reported in the Wall Street News. To trade stock on this exchange means that your stock ranges from blue chip stocks to new high-growth companies. Each company traded on this exchange has to meet very strict requirements. This exchange is responsible for setting policy, listing securities, supervising member activities, overseeing the transfer of member seats, and evaluating applicants. The major players on the floor are stock brokers and specialists.The NYSE uses an agency auction market system designed to allow the public to meet the public as much as possible. In fact, the majority of volume occurs with no intervention from the dealer. In the stock market game, the specialists mentioned above are responsible for ensuring that any imbalances of supply and demand are eliminated and are subject to fines and censures if they fail to perform their obligation. The brokers are employed either by investment firms (trading on behalf of the firm) or they trade on behalf of their clients. The brokers move around the floor of the NYSE and they bring “buy and sell” orders to the specialist. The stock brokers and the specialist work together to create and effective system that to provide those investing in the stock market, with competitive prices based on supply and demand in the open market.
In order to have the right to directly participate in stock trading on the NYSE means that you have to have a “seat” on the exchange. In 1868 the number of seat available was 533, but it has increased numerous times over the years. In 1953, the exchange stopped growing at 1366 seats available for directly trading stocks. Prices for these seats have varied over the years with prices ranging from 625,000 in 1929 to 4 million in the late 1990’s. This exchange now sells one-year licenses to trade directly on the exchange.
The NYSE is also known and is referred to as the “Big Board.” It is the largest stock exchange in the work by dollar volume and competes with the London Stock Exchange and the Tokyo Stock Exchange. The main building was made a National Historic landmark in 1978, located at 18 Broad Street between the corners of Wall Street and Exchange Place. It was established in 1792 as a result of the Buttonwood Agreement that was signed by 24 stock brokers outside of Wall Street. Unlike some of the newer exchanges, it still uses a larges trading floor to conduct its transactions. Other stock exchanges in the U.S. include the American Stock Exchange and the NASDAQ.
Market Direction: Huge profits can be made when recognizing which patterns are developing in specific market conditions. Advantage Number 1 for candlestick investor's is having a high degree of accuracy for projecting the overall market direction. The next advantage is being able to identify which sectors/stocks appeared to be showing the strongest signals. The may seem like a trite observation, but the whole premise for successful investing is to place investment funds into high probability situations. Candlestick signals and patterns create the investment program that puts all the probabilities in alignment.
The same patterns seen in the indexes will usually be replicated by individual stocks. The Jay-hook pattern, that used the 200 day moving average and the T-line as support, provided a fairly clear analysis of which direction the Dow was going to move. The next question was what was the next resistance level going to be? When the 50 day moving average did not act as resistance, it could be assumed the uptrend was still in progress.
DOW
Knowing which direction the markets were moving in general made the next step easier. Identifying which sectors were producing a strong buy signals. As mentioned in some of the previous newsletters, the solar energy stocks have produced very strong buy patterns. The recommendation of LDK after the gap up from the Inverted Hammer through the T-line has produced big profits in the past two weeks. The recommendation was stimulated by a strong buy signal in LDK, witnessing a strong buy signal in the solar energy stocks factor and identifying the market in general bottoming and starting an uptrend.
LDK
If other stocks in a sector are also producing strong buy signals and patterns, it has to be assumed that the money coming into the sector is doing so in a manner that will produce other profitable patterns. The recommendation for SOLF incorporated the same analytical elements applied to the LDK trade. A confirmed Scoop pattern instigating a strong price trend with a gap up through the T-line; a Jay-hook pattern produced an opportunity to participate in the next potential leg up. Is it reasonable to buy a stock that is up over a 100% over the past two weeks? It is if the recognized pattern shows the probability of another big price move. This becomes much clearer when you know what the signals and patterns are revealing.
SOLF
The past week of trading has produced numerous trade recommendations that are up 20% to 50%. This is not the result of being a stock picking GURU. This is the result of identifying high profit price patterns. Candlestick signals create the visual recognition of where big profits can be made. This does not require extensive technical investing knowledge. Learn how to use the 12 major signals correctly and your investment acumen will improve dramatically. This is not rocket science. This is common sense investment principles put into proven graphic formations.
Chat session - Chat session tonight at 8 p.m. ET for members. Mark your calendars! Thursday, December 13, Rick Saddler will be hosting the chat session. Rick will be providing a session to go over his 'Pin Ball' trading strategy; a technique he uses for making quick day-trades for both long and short positions in the same stock. Be sure to sign in early because every time Rick is our Guest Speaker the room fills to capacity. Unfortunately, any late-comers risk being left out of the session.
Good investing,
The Candlestick Forum Team
