What we have is a possible Hanging man. We have two of the three ingredients for a 87% chance of downward trend over next week or two if next candle is red. Given this weeks events, its looking bearish short term at the very least. Will be interesting to see how things shake out!
Let me know your thoughts of if this was helpful!
Not advice or a recommendation to initiate any kind of transaction. All investments have risks associated with them. Trade with care.
Comment
⋅
And that's 3/3 for Hanging man! 87% chance of downward trending price action over the next week+
End of the day selloff was interesting today. Then ES futures closed on green afterwards. There are bearish divergences in RSI up to daily level and right now also showing weakness on 2d, 3d and weekly charts. Everything looks toppy and that is exactly why fake out possibilities are high. There is too much money still out there to put in a local top just yet. Monthly chart of spy looks like a bitcoin bull run and no sign of weakness on the macro. So, I am thinking a choppy pullback to 430 level before turning around to make another ATH to wreck all the shorts. A good size 10-15% correction is due at some point, may not be right now. My money is on 430ish (10 week EMA) test in the next week or so and then upwards and onwards. We'll see.
deadsquare214
⋅
@mukit1, Thanks for dropping your thoughts. That sounds pretty well thought out. Could be right. I am leaning towards a 10-15 sooner prob before sept, but like you noted it could be an easy fake out. Cheers!
mukit1
⋅
@deadsquare214, things have flipped bullish today. Might get another stretch up before the real correction starts.
TraderNoah535
⋅
so you are now bullish on spy because it ended off strong with a green candle?
deadsquare214
⋅
@TraderNoah535, Thanks for dropping a comment! I will definitely be bearish if today ends in a red candle as it will be the third confirmation of a Hanging man pattern. the first is that the wick of a red candle is at least twice as long as the body, check. the second is that the candle has above avg volume, check. the third is that the following candle is red. it is a short term chart pattern and has an 87% chance of downward price action when the three conditions are fulfilled assuming I am remembering my stuff correctly. But this isnt a tutorial so I'm not bothering with adding references etc. Hope that helps! Cheers!