X.U.K.,
You win... It's a hammer, and on the futures, it has a small white head, indicating a reversal day as well. If you draw a downward trendline starting from the 7/20 peak, and connect with the 7/30 and 8/13 peak, you'll have the primary downtrend line from the July peak. What had me concerned about it being a hammer is that none of the head was located under this trendline. But, the tail of this hammer did in fact go back to this trendline, successfully testing it, which is definitely bullish for the short run.
But you have a point that the very short term trend from Wednesday was down, and the Head of the hammer DID open below this 2 day trendline, qualifying it as a hammer. The concern for a sustained rally is that the hammer is reversing only a s-t trend, as the longer term (back to 7/20) down trend was broken on 8/15. I agree with you, however, that a short term rally is in order, and am already positioned accordingly. (Who needs Favors? <g>). Every wave count conceivable is in agreement with a s-t rally through Tuesday a.m. at a minimum.
Looks like a stalled rally at 8600 for a couple days would complete a right shoulder on a powerful looking head and shoulders pattern that would project to 7330 once 8320 is taken out. How big a rally are you looking for this week?
Regards,
David |
