Hanging Man Candle today

SPCFD:SPX   S&P 500 Index
A hanging man candle by itself doesn't mean a lot because without confirmation it's just a candle. However, along with that candle, the P/C Ratio dropped to 0.63 today, the lowest reading in a very long time.

At the March and September highs we had P/C Ratio readings at higher levels but even so the low readings then were enough to stop the market from moving higher. Today's low reading has the same potential. It indicates that there's no fear in the market and that no one was fooled by today's market action but instead they all moved over to the same side of the ship.

This is never a good situation but the market will let us now soon enough if it means anything.


First of all , why would we even try to guess if the SP will reverse ? How many time we've seen stochastic to stay in overbought territory for long time, specially when we have huge rallies? Its the price level that is the only and one best indicator of how we shall take a position. I'd rather wait to see how it will trade tomorrow from the open, determine the crucial levels. When it will trade around those levels take appropriate action. In this case: We see it cleared the 1.390 level nicely. The it cleared 1.400 bounced of 1.409 which is previous 11/02 intraday low ( resistance), tested the 1.400 , shook up few weak hands and closed above it. Only if it closes tomorrow on Tuesday below 1,400 I'd consider weakens. Till then holding to the long.