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This morning’s rally has now reversed to the point where the Nasdaq Composite is soundly in the red. If you look at the daily charts of the major indices though, you will see that we are basically printing a bunch of doji/indecisive candles that are rather small in size compared to the action in recent weeks. On doji days, overtrading is usually a huge mistake for traders. I do not want sound complacent, as I believe the bulls have plenty of traps to avoid, but overall this type of action is reasonable and constructive after the v-shaped bounce over the past week of trading. It is akin to threading the needle, in the sense that the bulls do not want to give up too much more ground while charts attempt to set up again. It is also worth noting that we are roughly 100 S&P points off of last week’s lows, which indicates to me that today’s reversal is far from a rollover.
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hey chess, i see you use reddit as well 🙂