Today's market action created a "Dark Cloud Cover" candlestick on the close. This is a bearish reversal formation. For confirmation, we would like to see continued bearish movement tomorrow. The close today was right at the rising trendline, perhaps even just below & the market began pulling back near a previous gap down level (dotted pink line). It's important to also note the bearish divergences with the RSI & Accumulation/Distribution indicators as well. Tomorrow may be a big day in deciding which way this market breaks.
If the market continues higher, a move above the gap level of $290.23 will negate the bearish outlook & return to a bullish stance. Be prepared to protect profits on any open positions you may have as none of us knows how far the market can drop on any "pullback" in this current market.
If the market continues higher, a move above the gap level of $290.23 will negate the bearish outlook & return to a bullish stance. Be prepared to protect profits on any open positions you may have as none of us knows how far the market can drop on any "pullback" in this current market.
Comment:
So, I was getting ready to exit any bearish view on the market again until that selloff that started toward the end of the trading day. The SPY closed right around the resistance trendline. Mr. Market makes nothing easy for us. I am definitely more bullish as the market closed above the gap level & RSI broke out as well but I still want to see prices close above that resistance trendline.