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Markets were up almost 1% yesterday, then retreated. Creating an upside wick in most major markets. This all took place at key fibonacci resistance in the 500 index. One day a trend does not make, yet this type of action needs to be watched very closely!
Game Plan… Keeping the IWM position (owning small caps, due to relative strength), with a tight stop of 2%. Might harvest these gains today if market action looks negative, stay tuned. Remain very open to attempting to score on defense at these levels, yet have not seen enough evidence to do so yet. Watch for updates today and tomorrow for a potential to score on defense.
I’m glad I included the time of day of my prior observation. The potential doji which was shaping up then as the display of today’s trading only minutes before today’s close “printed” at the close as a hanging man, which is also thought to be bearish when it appears at a top like this. Chris’ assessment should be interesting…
Isn’t his reference to the market of 12-7-10, Tuesday, and didn’t SPX “print” a shooting star that day? That’s thought to be a bearish candle when it appears after a prior advance, particularly at the overbought level, as in this case. StockCharts seems to use BATS data and it shows a significant volume increase yesterday. The doji appeared this past Monday and, at 3:48 PM EST, today’s trading is shown as a second doji, with longer wicks on both ends.
Can you confirm if that was the biggest Volume day (Dec 7) on the S&P500 since before the lows in the summer. And does that mean anything being a doji and all?