AMEX:IWM ISHARES RUSSELL 2000 ETF
Last week we had a great example of a harami candle formation on the weekly chart. A few weeks previously we a weekly engulfment.. The intermediate tend line is broken from last October. Still the long term up is intact but I think there is a good chance we will be at least testing that line, esp if we finish the week with an another engulfment formation. We'll see. Have a good week. Goodguy.
Mr West my current view is that most likely the large engulfing candle is basically the first wave down and the post engulfing action is corrective. The correction made it to .68 but not .78. so we still may be in part of the correction today. The other option is we are in a set up (1-2, 1-2 wave in EWT jargon) for a big drop just ahead. Personally I am not sure how to add my current chart to this reply or I would do it. One problem I have observed over the years with bearish candle formations is that they are also frequently occur in consolidation patterns as well (such as triangles). So that remains a possibility but less favored by me. Hope I have answered you question.