Reposting Friday’s assessment about a gap on Monday and an alert for next 2 weeks:
The worst materialized. Major indices closed the week with very bearish weekly candles/combos. Expect at least one more week of decline and let’s explore the details.
NDX and SPX – Bearish Engulfing
This formation comes with more than 80% of probability of multi-week decline. The probability of at least one week of decline is close to 90%.
DJI – Advance Block formation
Closed with a Hammer upon an Advance Block. A strong bearish reversal combo. However, not as strong as the Engulfing.
RUT – Bearish Maribozu
The way the candle is formed and placed suggests that the next week RUT to expect more downwards movement.
I would not be surprised with a gap down and go on Monday.
Note that if the indices continue to go down for the next 2 weeks, they would form some bearish monthly candles/combos that would make damage on the monthly frame. Something to keep in mind.
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