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Last month I had a post on the S&P showing signs of Distribution in the Candlestick Analysis, which I highlighted in Blue Ovals on the Daily chart right hand side below. One resembled a "Spinning Top" and the other resembled a "Hanging Man". The hanging man is similar to a "Hammer" in that is has a large wick below the body of a candle. However a hammer at the bottom of a trend indicates strong demand. This type of candle near the top of a trend was a sign that supply was entering the market. Japanese Candlesticks need confirmation and the following week was a strong week in price negating the prior two candles for the time being.
This week there is what I believe to be another bearish candle to keep an eye on. It resembles a bearish "Engulfing Pattern", however this week's body or opening and closing range, doesn't quite "engulf" the prior body, but it is close. However this week saw higher highs and a lower close, as well as lower lows. While volume data comparison is skewed with last week being shortened by one day, this weeks volume was above average. It is another caution flag that there is high risk going long Equities in my opinion. Next week it will be important to see if there is a weekly candle with lower lows and lower highs and a lower close with increasing volume. Near term the Bulls did a huge service taking back the significant multipoint trendline support that had failed on the Hourly chart. I will be looking for follow through or a move lower early next week in order to day-trade long or short. The NYSE 52 week highs minus 52 week lows indicator has also been consistently weakening. A sign "under the hood" that things are not as strong as they may appear in the headline indexes. (Click on chart to expand)  NYSE  The key reference areas, trendlines, support and resistance levels, and developing patterns are shared each morning in the swing/position trade premium service. A focus in the updates for the month of May when the next subscription begins will be on Auction Market Theory. Email for interest. Stocktwits & Twitter @ ScottPluschau Email: ScottPluschau@gmail.com |
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Posted: 06 Apr 2013 05:08 AM PDT
In yesterday's post I mentioned the Nasdaq 100 had a potential change in trend coming on the Daily chart, and initially when the trendline broke it was downhill, but the Bulls were dip buying on the open of the day session and didn't stop for the most part pushing the Nasdaq 100 back up to the prior trendline support. This was a major reversal and you can clearly see a big "wick" or bottoming tail on Friday's price action.
What I would want to see next week in order to trade long is if the Equity markets are able to follow through on Monday with this momentum. Near term the NQ is still trading below the break of a significant multipoint trendline on the Hourly chart. If early on Monday the market is weak, I will be favoring the short trade setups. (Click on chart to expand)  Nasdaq Composite 52 week highs minus 52 week lows indicator went negative in the morning and closed just above zero. Under the hood things are weakening still.  The key reference areas, trendlines, support and resistance levels, and developing patterns in the near term and bigger picture are shared each morning in the swing/position trade premium service. A secondary focus in the updates for the month of May when the next subscription begins will be an education on Auction Market Theory. Email for interest. Stocktwits & Twitter @ ScottPluschau Email: ScottPluschau@gmail.com |
April 6, 2013
S&P Sees Weekly Distribution and NASDAQ Reverses to Support
