J o A T,
Dan, what's your take on today being an inside day?
stockcharts.com
stockcharts.com
stockcharts.com
stockcharts.com
I'm sure there are better chart readers than myself around here to give an opinion on this one. My take is that by itself an inside day only means uncertainty, especially when you have a doji/spinning top thing like COMPX, NDX, SPX today. And if you include the tails, we did not quite have inside days on the Nas. I don't think that is of great significance since the highs are so close.
The Dow shown in the link is a bit hanging man-ish, but the tail is not deep enough to be of real concern. As an interesting little aside on index charts, MyTrack always shows Dow and SPX open at prior day close, so one-day candle patterns lose something there. Since NYSE stocks open gradually, there really is no precise "open" for the index. The intraday charts show the fuzzy "open" fairly near the top. Other services like the links above have some way of dealing with this, but I'm not sure if it's reliable. In myTrack, there is a difference between DJI and INDU. INDU is calculated by doing a Dow average of all the opens, all the closes, all the highs, and all the lows of the 30 Dow components. This gives long tails every day, but today's INDU candle is a very near Doji with a dark body of length 18 just about in the middle of yesterday's white body.
The only Dow resistance I see at the highs from yesterday and today is a high back in May, with no corresponding peak in SPX. SPX is hitting the late September congestion. NDX/COMPX have this recent gap in the way. I think you just need to see how these inside days resolve on subsequent days. Whichever end of yesterday's bar breaks first is the likely direction we go from here, but a gradual decline could just be the beginning of a bull flag on the Dow, or a long consolidation like in late September to early October.
My understanding is that the "buy wiggle" is a rare pattern, and as the name suggests it has greater probability to continue to the upside. I have no statistics on its reliability, or if a 5-day is as strong as a classic 3-day pattern.
Dan |
