US30 Incoming Wave! On the Hourly, a Double Inside Day showed up. That means a BIG move is coming, either to the upside or the downside for this Sunday.
You can see that the candles are within a channel created by two S&R Zones, so a breakout is in order.
*Side Note: If you'd like to see a previous example of BIG moves from two, back-to-back Double Inside Day patterns, look to the left of the chart. The first one led to the long bullish trend (highlighted in green) of 201 ticks in length and the second Double Inside Day (circled in blue) led to a very long bearish trend (highlighted in red) of 558 ticks in length.
US30 *Trading Tip: Many traders are familiar with the W, M, and V-shaped patterns I call alphabet patterns on all charts and timeframes. But are you familiar with the J-Hook and S-Hook?
The J-Hook is a pattern with consolidation in its middle to create a curve that leads to a continuous bullish trend (highlighted in green). The S-Hook pattern with consolidation in its middle to create a curve that leads to a continuous bearish trend (highlighted in red). There are very tall to smaller versions of these two patterns that are very common.
So, a J-Hook + S-Hook = Head-and-Shoulders Pattern
An S-Hook + J-Hook = Inverse Head-and-Shoulders Pattern
*The Hourly pattern on the chart below is an Inverse Head-and-Shoulders Pattern.
*Side Note: In Japanese Candlestick Analysis, there are other kinds of alphabet patterns not common to many traders.
US30 Check out the new S&R Zone on the Hourly chart below. As the tall bullish candle rises above it to fill the upper wick of the previous tall Shooting Star, we'll see if the bulls can reach and breach the Major Pivot High at 46,217 (shown as a circled red arrow) with a candle close past that price. If not, back down it goes from this Resistance Area.
We'll see if the new S&R Zone blocks a bearish retrace to prevent going below this Zone.
Also, there's now a S&R Zone, above and below. There may be a game of Pickleball between the Zones until a breakout.
US30 It's like a Ghost Town today. Where is Everyone? Hello (knock, knock).
Anyways, on the Hourly chart below, look at the previous two bullish candles. Each one had a hard time closing past the high of its previous candle. That's a sign of a waning, bullish thrust. This current candle is having trouble doing the same. A bearish pullback is coming - potentially to around 45,902 that is the current mean reversion price for the Hourly. But, there may be an upper wick fill in the new hour before the pullback.
*Suggestion: Please read my post from 14 hours ago entitled "Trading Tip" to avoid confusion about these candles with tall wicks.
US30 Taking a look at the 8-Hour that is in Bearish (directional) Market Bias, a Double Bottom formed with the lower wick of this tall bullish candle. It rejected the Inside Day's low of 45,138 for a breakout and can head for the pattern's high of 46,546 (shown as orange lines) for a true breakout.
You can see that the Double Inside Day played out as a BIG move that showed up earlier as the long bearish drop.
A bullish pullback can be towards 46,371, the current mean reversion price for this timeframe.
Also, the last two candles formed an Outside Day (also called a Bullish Engulfing). So, a blue dotted line called a "Limit Line" was placed across its high of 46,069. To know if the bulls want to keep going up with intent, there needs to be a bullish candle in the new hour that does a candle close past that line and then another bullish candle after it to "clear" past the line to not touch it at all. If one or both moves don't happen, then back down it goes.
US30 Incoming Wave!
