A stellar late-day rally to close the day (and perhaps this recent downtrend) in a Hammer candlestick (except for the $INDU, which saw a Long-legged, Higher close than open, doji's).
Take a look at the Russell2000 Index, especially what has happened in the past preceding this type of candle pattern.
The close of this day had the feel of more than just a short-covering-into-the-weekend type of day. It had more of a jostling to get on board for what may be a decent bounce into Moday feel.
The SPY hasn't seen this much volume in quite some time:
There's no certainty that we will get a bounce higher on Monday, but the odds do lean that way.
Here's a look back in 2008, when volatility was high, and selling was non-stop (and nervous short-squeezes were common after fresh lows), I outlined what has followed a day where price opened slightly higher, sold off to make new low in the downtrend, then rallied to close higher on the day. On the Q's:
I used the Q's as an example, because the SPY didn't have as many occurrences (Higher open, lower low, higher close in a down trend), but the herd mentality/psychology is the same. Here are some examples from the SPY in '08.
Should we get a sizable bounce from here, and healthy consolidation, we'll have to start watching retracement levels for the possibility of something like this;
Higher Highs, Higher lows! :0 Not saying it's probable, just the possibility.
OK, this isn't exactly a Bearish Meeting Lines pattern in BA, but comes within a few cents:
Nice example of Support-turned-Resistance looking at the weekly chart:
A Bearish Hanging Man in GS:
Not very glamorous, but a Bearish Engulfing pattern on the XLI:
Bearish Dark Cloud Cover IYT:
Though the IWM was sold from it's highs today, it only closed a dime off of those highs on relatively light volume, while momentum could be setting up for continued upside.
However, this wall of overhead resistance will be formidable.
Feb.23rd was the last that we've seen a -1000 TICK reading. So, perhaps we should look to that, coupled with some strong volume for clues of a correction worth taking seriously.
The close of this day had the feel of more than just a short-covering-into-the-weekend type of day. It had more of a jostling to get on board for what may be a decent bounce into Moday feel.
There's no certainty that we will get a bounce higher on Monday, but the odds do lean that way.
I used the Q's as an example, because the SPY didn't have as many occurrences (Higher open, lower low, higher close in a down trend), but the herd mentality/psychology is the same. Here are some examples from the SPY in '08.
Should we get a sizable bounce from here, and healthy consolidation, we'll have to start watching retracement levels for the possibility of something like this;
Higher Highs, Higher lows! :0 Not saying it's probable, just the possibility.
The 5-min SPY showed some nice examples of Inverted and Regular Cycles (referring to this post on Stevenson Price and Time Targets). You can think of a Regular Cycle as a phase which sees Accumulation followed by Distribution, and an Inverted Cycles as a phase of Distribution followed by Accumulation, which is all the "tape" really is.
The large cycle in the middle of the chart (33-bars in length) actually contained a number of smaller cycles, lending to the extension of this particular cycle (mid-day noise = lower time-frame cycles are dominant?). Here's a close-up of that 3-hour period:
But look under the hood of that monster and what do you have? Chop!
Something to keep in mind (on all time frames) is that a Doji candle represents a trading range. In other words, there's nothing to trade (nothing "easy" anyway) within a trading range, there are better places for you money. This can be said of the Doji cousins as well; the High Wave candle, Spinning Top, and the silly long-legged Doji.
