Back in mid-February I noticed an interesting and definitive signal in Copper, a la Japanese Candlesticks (JC). That indicator showed a crystal clear reversal pattern, first a Doji Star and then a Shooting Star. These terms may seem esoteric to you but I have found that reversal patterns in JC, especially in long-term charts, are high percentage winners. Since that post, during a period of major gains for many commodities, copper has fallen about 10%.
Now, believe it or not, last months drop and recovery has created an Evening Doji in the SPX monthly chart. Coming after a major intermediate-term up thrust, it is the first non-traditional techinical sign of a market that may be finished with its fun and festivities.
Granted, the only technical analysis that has worked has been to follow the uptrend and to buy every dip. Any indicator that is widely heralded or easy to see has been rendered impotent. Whether it is through POMO or any of the other liquidity producing manipulations is not important. What is important is where we are and the pattern that is developing.
With the end of tax season in sight, the vast majority of the retirement account inflows will slow significantly. And with only about a hundred billion left in QEII, June is right around the corner.
Chances are we don’t fall off the cliff when everyone expects it. Perhaps, like copper, it will take more than one month and more than one candlestick topping pattern to seal the market’s fate. Considering the market came screaming back from Middle Eastern revolutions, Japan’s disaster and a nuclear meltdown, complacency is running at all time highs while volume is running at multi-year lows.
This and many other in-depth charts are published at CreateCapital/CreateCoin.
Very nice. Watching this market every day is like a toothache with no painkiller.
The evening star, as all candlestick patterns, require confirmation. I have found it is not profitable to anticipate them, now more than ever. As you said, almost all technical patterns have been rendered useless (by the Fed IMO)
Great work !!
The evening star is a three candle formation. A long white candlestick. Then a small white or black candlestick that gaps above the previous candlestick. (This candlestick can also be a doji, in which case the pattern would be a evening doji star). The confirmation is then a long black stick.
The SPX did not have a gap up last month. Sorry, but this is not even close to an evening star regardless of what candle might for form for April.
It is rare to see such an extreme cross or star at the top of a long uptrend, into huge resistance and at a double top. Plus, the retirement money ends as does QEII in the very near future.
After all the events that seemed to have zero effect on markets, there is “nothing” that can touch this “teflon market”. I find this setup to be “exquisite”. So yes, I am “anticipating” by one bar.
And though I wholly disagree with your statement that “this is not even close to an evening star”, I appreciate your interpretation of Candlesticks.
Yep Copper topped, AAPL topped and US Dollar is looking like it is holding support…..finally we may get a top.
Do you want a top so your predictions can be true? Or so that the economy can tumble?
My only “want” is for my members and our readers to manage their risk well. Reality eventually sets in, always. Wall Street calls it “reversion to the mean”. It’s never personal…
it has. i know this sounds crazy,for me,just looking at lumber’s daily movements tell me whether we are up or down with minimal lag time, i have studied this for a few years now. and the last 4 trading sessions especially have been correct. has nothing to do with actual lumber stocks per-se.but i have my doubts sometimes especially with lpx as opposed to wy, or even pcl. disc: no position anymore in the lumbers.
possible puke bottom day for PRGN, Mr B ?
stay tuned, the day is only half baked. 8)
Scott: Are you still holding PRGN? are you adding at these levels? Thanks for your input