The over bought condition in the S&P500 is really extreme, few times the market can get 20 sessions with out more than 1 session of rest pushing for new highs. The father of candles in western, Nison, states that more than 8 is over bought so...
Afther all this, a shooting star reversal appears, and very noticeable, but have 2 main problems:
1) the short reversal in an up trend is more a sing to take profits than to open a new trade
2) the lack of other signals to anunce the start of a new trend, like a divergences, makes the sell in this time just for brave hearts (at least).
So even when we think that this could lead a down side movement the odds are greatly for just a pullback, most probable only to retrace the 38.2% of the last upside movement.
If you consider this as a target, for the pullback, the reversal will need to retrace (move to the upside) at least to the top of the body of our shooting star.
Afther all this, a shooting star reversal appears, and very noticeable, but have 2 main problems:
1) the short reversal in an up trend is more a sing to take profits than to open a new trade
2) the lack of other signals to anunce the start of a new trend, like a divergences, makes the sell in this time just for brave hearts (at least).
So even when we think that this could lead a down side movement the odds are greatly for just a pullback, most probable only to retrace the 38.2% of the last upside movement.
If you consider this as a target, for the pullback, the reversal will need to retrace (move to the upside) at least to the top of the body of our shooting star.