Musings Over Candles

Today’s closure of all cash indices calls for a reversal (lower row on the chart).
– SmallCap produced a solid Bearish Engulfing, shifting the odds to the bear’s side.
– SPX has confirmed yesterday’s Bearish Harami Cross. Expect the downtrend to continue
– NDX stopped few pips short from fully confirming the Dark Cloud Cover that was completed yesterday. A very powerful statement, considering the entirely bearish closure in all other indices.
– DJI confirmed the Bearish Harami Cross, similarly to SPX.
Similar readings for the futures. Though they have few more hours until closure, I highly doubt they would be able to recover the RTH damage.

From the patterns perspective, the ES price is decisively back into the Rectangle after 2 rejections. Now the previous ATH is an enormous resistance. The level could be backtested from within the rectangle or the downtrend could continue immediately. I think I would be switching back to my green count I have been talking about since mid September and would need few more days to fully confirm.

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