CANDLES SPEAK: December 1, 2020

Today’s closure in major cash indices leaves me with the thought that everyone is waiting for DJI. If you look at SP500 and NDX, they completed their diagonal waves with the minimum number of sub-waves and both hit the new ATH. The SmallCap seemed to completed the pattern last week and is just in a waiting mode, piling up the bearish candles.

1. SP500 produced a classical Evening Star that gapped above the previous all time high (ATH). A confirmation or cancellation would be required tomorrow.
2. NDX looks like a Spinning Top that also would require a confirmation tomorrow.
3. DJI made a Hammer inside of the previous red body. The Hammer could be a false flag and would require a confirmation for either direction.
4. SmallCap is definitely bearish and would need a strong reversal candle to overcome this mood.
In summary: Market could try another swing higher tomorrow, in order to help DJ to complete the pattern, and then reverse. There is also an option for a direct move down. In this case the DJ would have a truncation with all ensuing consequences.
If tomorrow indices produce clear continuation candles that cancel the bearish build-up, there is a good chance for another swing higher.

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