I think that today was a rather crucial day for the daily candle formations in all major indices and I would like to share my interpretation of today’s sentiment from the Japanese candlestick theory perspective.
The Small Cap today opened with a gap down and despite the attempts to close it, the gap of 2 pips!!! remains open. If the gap does not close tomorrow, it would act as a huge resistance level for the foreseeable future. Remember 2247.57 mark.
As the the index formed a very powerful bearish Maribozu candle, it is expected to continue tomorrow. Note that the daily PSAR has flipped today to the dark side and the RSI is also very supportive of the continued downtrend.
Yesterday was a classic failed attempt to make a Tower Bottom. The index was working the whole day to try to close above the large red candle, but in the last minutes it was pushed back hard.
Today’s action fully canceled the attempt and confirmed that the odds are strongly on the bears side.
Tomorrow, I would not be surprised if SP500 makes a statement and opens with a gap down below 3886.75.
Yesterday, Nasdaq advanced on a very thin volume with the candle that indicated a significant selling pressure. Today the index produced a Dark Cloud Cover combo that is likely to have a bearish continuation tomorrow.
Dow Jones Industrial
There were weak hopes for a rally after yesterday’s closure by Incomplete Piercing Line. However, today the index produced a healthy cancellation of all bullish dreams by fully overlapping the green of yesterday.
Note that the daily PSAR is on the verge of flipping to the bearish position. It could happen tomorrow morning.
My confidence is growing on this call on Nasdaq – https://investingangles.com/2021/03/20/nasdaq-long-term-forecast-educational/