• Yesterday, the SPX broke the resistance at 3,911 for a brief moment, but by the end of the day, it lost momentum, couldn’t close above it, and it did a Shooting Star candlestick pattern; • This could be just a pullback to the 21 EMA, but the fact it found a resistance at 3,911 again it is not good for the bulls; • We warned about this on my previous SPX analysis – link below this post; • This Shooting Star might frustrate any attempt of a bullish reversal, and would require a very impressive bullish reaction to frustrate this bearish sign. Ideally, it would need to break the Shooting Star's high in order to reject the bearish candlestick; • The way it closes yesterday will tell us if the index will confirm a bearish continuation to the 3,744, or if it will reverse and seek the 4k area again; • According to Bulkowski’s studies, a Shooting Star works as a bearish reversal 59% of the time, and when triggered, hits the technical target 84% when we are in a bear market, and see a downwards breakout; • I’ll keep you updated every day on this.
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look back at august. we saw two of these shooting star dojis on the way to 4300 top of 16 aug. the PA mon>tues looks a lot like the desperate climb before the big drop to LOTY. could get similar PA on CPI thursday, irrational optimism. fed just said they wont change policy until target goal is met. but endless happy speculation that they might anyway drives price regardless... ty 4 post!
Thanks Nathan for the details, now I understand the pattern and next move, the Bulkowski comments are awesome and first time I heard them... looks like a nice short is coming.
Nathan_Black
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@XmanFL, Cool! Yes, I recommend Bulkowski's books and website for more info about candlesticks/chart patterns. Thanks for the feedback! :)