The Party is Over and Candlestick Reversal Patterns Are On The Charts
Friday, August 28, 2009 | William Kurtz Is this Spam?It has been quite a party since March 10. Since then, the Dow Industrials Average has risen 2702 points (39%) to what may be the ultimate top of the Rally today. There have been increasingly insistent Candlestick warning signals over the past several days that prices will soon reverse; and our Candlestick analysis of today’s patterns across the various major Indexes only served to confirm them.
To back up a bit: The all-time High in the Dow occurred on October 11, 2007, at 14,198.10. (Someone sold at that price, and someone bought, too. Perhaps that latter someone should be awarded a medal of some kind). That point marked a major turn in the market, in that the major underlying trend changed from Up to Down. From there, the Dow declined (with two good bumps along the way) all the way to a Low of 6470.10 in March 2009. Then a bear market Rally set in, which has carried prices to the High of 9629.37, which was set today. The underlying bear trend has not changed; it’s just that this Rally has been an upside correction, which is now ending, and we are due for a reversal.
This week, we have seen many bearish Candlestick stock Index reversal patterns emerge. We have spoken of some of them in our Candlestick investment newsletter; and now that the week is complete, we intend to issue a general recap so that all of the patterns will have been identified.
For example: In the Dow Industrials Index, we saw Shooting Stars on Monday and Tuesday; a High-Wave Spinning Top on Wednesday; a Hanging Man on Thursday; and a Bearish Engulfing Pattern today. The S&P 500 was a duplicate of the Dow, except that today’s bar was a High-Wave Spinning Top. The NASDAQs each left a High-Wave Hanging Man. The S&P 600 and the Russell 2000 each gave us a Doji Hanging Man on Thursday and a confirmatory lower close today. The Dow Utilities Index has closed Down four days in a row in black Candlestick bars. All of these signals warn of the possibility of a trend reversal. We interpret all of them, together, as indicating not just a possibility, but a probability, that prices will decline soon if not immediately. We intend to so indicate in the next issue of our Japanese Candlestick Investment Newsletter to be published this weekend.
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William Kurtz
August 28, 2009
info@candlewave.com
http://www.candlewave.com
