Musings Over Candles

Today cash indices and futures were sending somewhat mixed messages after the closure. let’s start with the most convincing ones.
Futures (upper row):
DJI – completed a Three Black Crows, a very bearish continuation combo.
SP500 – produced an undecisive doji. However, the red color of it hints towards slightly higher odds for the bears.
SmallCap – the candle could be treated as Bullish Engulfing, but there are some signs that do not fully support the hypothesis.
Nasdaq – produced a Piercing Line combo, flipping the odds slightly on the bulls side. However, the combo requires a confirmation.

Cash indices (lower row):
DJI – after yesterday’s confirmation of the Harami, today it produced the On-Neck combo that hints towards further downtrend. Together with DJ futures, it is a powerful statement.
SP500 – made an incomplete Piercing Line that requires a confirmation if the trend is meant to reverse upwards.
SmallCap – produced a Piercing Line and I will be looking for a confirmation tomorrow.
Nasdaq – completed a Bullish Engulfing. This one is not well supported by other parameters and would require a confirmation.

Overall, I view tomorrow as a bearish day with the potential to reverse and start a rally.

%d bloggers like this: