After this morning’s sharp thrust down, the dip buyers came to the rescue and we are now soundly in the green. Across the daily charts, I am seeing many “hanging man” candles that are in the midst of being printed. In Japanese candlestick terminology, a bearish hanging man candle does not differ in appearance from the bullish hammer. However, hanging man candles can appear at the end of an uptrend, indicating buying exhaustion, whereas hammers appear at the end of downtrends. Both of these candles require confirmation in order to declare a reversal of trend.
Those candles, combined with the troubling action in $AAPL that I discussed this morning, have me putting any new longs on hold. I want to be clear that I am not calling a top to this market, so much as I am taking a pause for at least this afternoon. I will let my current longs run, and still have my ultrashort $QQQQ hedge.
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why would you use the q’s as a hedge – isn’t AAPL 25% of that?
I detailed my reasons in earlier blog posts.