The close on Friday left was appears to be a "Hanging Man" candlestick. With this occurring during an uptrend this could potentially be a bearish warning sign. We must wait for the confirmation of the CLOSE of trading on Tuesday to find out whether this candle is bearish or not. For confirmation to occur Tuesday's closing price must be below the LOW of Friday's real body. If the price does seem to be confirming a bearish signal then people who have long positions should look to take some profit off the table or close out their long positions entirely to better utilize their capital following a pullback or consolidation phase. If Tuesday's trading should close higher than Friday's real body then the bearish signal is canceled & expect more upside to continue.
I labeled a few candlesticks from A to E which stuck out to me:
A) The previous high made prior to the pullback. An important level
to watch for future bullish breakouts which eventually occurred
at the candlestick labeled D.
B) This candle is an inverted hammer candlestick which was
produced the day after a potential low was put in off high
volume. This is a signal that the market may be turning bullish.
C) A Doji candlestick was produced around the price level noted on
candle A showing there is a battle going on about whether this
area will continue to be resistance or if a true breakout will
occur.
D) A bullish engulfing candlestick formed after prices held both my
initial price target level & a rising window area created from
February 4th to February 5th.
E) The candle produced on Friday was a "Hanging Man" which is a
potentially bearish candlestick when formed during an uptrend.
We need confirmation from the following trading day(s) to see if
this is bearish or not. For bearish confirmation, the price must
close below Friday's real body price. A close higher than Friday's
real body negates its bearish connotations & shows that the
bullish move will continue.
I have also noted the numbers 1-7 on this chart. These label the current amount of new highs being created without a significant pullback occurring. The Japanese believe when trends run 8-10+ without a pullback you should be preparing for one. I note this because we have a potentially bearish candlestick from Friday & we are at a 7 on the current long count pattern.
Price has currently risen past my initial price target & has found support around my second price target. If bullish momentum continues I am looking at my third price target around $346.50. It is important to note that the dotted blue line is my current P&F price target which still sits above my Fibonacci level targets (which I view as showing plenty of bullish momentum under the hood of this market).
Overall, I am still bullish on SPY & the markets overall. Even if Friday's bearish signal is confirmed I would use that as a signal to take profits or closeout long positions you are not certain about. After the pullback/consolidation occurs it will provide us another opportunity at entering some strong names that may be a bit overextended at the moment.
I labeled a few candlesticks from A to E which stuck out to me:
A) The previous high made prior to the pullback. An important level
to watch for future bullish breakouts which eventually occurred
at the candlestick labeled D.
B) This candle is an inverted hammer candlestick which was
produced the day after a potential low was put in off high
volume. This is a signal that the market may be turning bullish.
C) A Doji candlestick was produced around the price level noted on
candle A showing there is a battle going on about whether this
area will continue to be resistance or if a true breakout will
occur.
D) A bullish engulfing candlestick formed after prices held both my
initial price target level & a rising window area created from
February 4th to February 5th.
E) The candle produced on Friday was a "Hanging Man" which is a
potentially bearish candlestick when formed during an uptrend.
We need confirmation from the following trading day(s) to see if
this is bearish or not. For bearish confirmation, the price must
close below Friday's real body price. A close higher than Friday's
real body negates its bearish connotations & shows that the
bullish move will continue.
I have also noted the numbers 1-7 on this chart. These label the current amount of new highs being created without a significant pullback occurring. The Japanese believe when trends run 8-10+ without a pullback you should be preparing for one. I note this because we have a potentially bearish candlestick from Friday & we are at a 7 on the current long count pattern.
Price has currently risen past my initial price target & has found support around my second price target. If bullish momentum continues I am looking at my third price target around $346.50. It is important to note that the dotted blue line is my current P&F price target which still sits above my Fibonacci level targets (which I view as showing plenty of bullish momentum under the hood of this market).
Overall, I am still bullish on SPY & the markets overall. Even if Friday's bearish signal is confirmed I would use that as a signal to take profits or closeout long positions you are not certain about. After the pullback/consolidation occurs it will provide us another opportunity at entering some strong names that may be a bit overextended at the moment.