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.
