This week all major US indices and their futures – SP500, DJI, NADSAQ, Russell 2000 – produced the weekly candle combos that hint towards a possible trend reversal (refer to the chart above).
NASDAQ has completed a Bearish Engulfing in the cash and the futures. The combo is considered the most bearish of all bearish reversal combos.
SP500 and Russell 2000 finished the week with a Dark Cloud Cover, the next most bearish after the engulfing. This one requires a confirmation, ideally the next week.
DJI ended with the Spinning Top that also requires a confirmation.
NASDAQ futures has completed a Three Black Crows on the daily chart, a very strong bearish multi-candle combo, hinting for a continued bearish trend.
SP500 produced a somewhat similar combination of candles.
DJI is levitating at the top, making a line of Dojis and Hanging Men that is more likely to resolve downwards.
Russell 2000 had a Three Black Crows in the middle of the week and closed with a Bullish Engulfing on Friday, a real tug of war.
Overall impression is that the bears are in the driver’s seat and the odds favor them strongly. Based on the weekly and the daily candle build-up, I would estimate that there is 65-70% probability of a reversal at this point.
The next week is critically important as the Weekly and Monthly candles will be printed on Friday, February 26, projecting the path for the next multiple weeks and months.