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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 681.44+1.6%Nov 10 4:00 PM EST
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To: el paradisio who wrote (51387)5/20/2000 2:18:00 PM
From: Casaubon  Read Replies (1) of 99985
 
I believe the mistake that you, and many other candle readers, are making is to view last weeks candle as a hammer. It is not. A hammer must occur at the bottom of the previos periods price range! Likewise, the last candle is not an inverted hammer, as you claim. Again, inverted hammers must occur at the bottom of the previous periods price range. Neither of these candles occurred at the bottom of the previous periods price range. They are simply long-legged candles known as high wave (takane nochiai). In particular, if you combine the last two weeks candle pattern you arrive at one single high wave candlestick, with two weeks of volume! The fact that this combined candle did not achieve a new high is very significant and strengthens the bearish nature of the long upper shadows which occurred over the last four weekly candles. Last weeks candle is a failed upthrust which attempted an assault of the lost ground which occurred 6 weeks ago in the form of a massive bearish engulfing candle. That engulfing candle engulfed the prior three weeks candle pattern and represents significant resistance. I would expect a minimum retest of the 605 support area found in mid april as a result of the yang Marubozu of 03/16/00.
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