Tuesday, December 6, 2011

Last several days may look different

Today the market formed a doji candlestick. Doji's mark a candle of indecison but can also reveal to us that consolidation maybe taking place. The bullish scenario would allow a break above the upper trendline and pop stops from investors who hold short positons. Those shorting the market hold large positions at the trendline drawn, the 200 day moving average, and the last minor high at 1292. The advance would be limited and act as a shorting opportunity due to such a large amount of overhead supply. Remember that Head and Shoulder topping pattern took 6 months to form.

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