An interesting couple of days in the trading pattern. Each was at first for me a reaction of disappointment. Yet, at day's end, the selling pressure was countered and each day closed with evidence of strong candlestick hammers. One would have to look at much higher prices and volume to find comparable sized AXC hammers occurring after declines.
At the end of declines, hammers are considered to be turnaround indicators. They represent evidence of buyers eventually countering the day long onslaught of sellers to the point where the close matches the high of the open before the onslaught began.
Volume also had a moderate pickup over these two days. Same data, but from a different measure shows Chaikin money flow as turning up and thereby signifying more money in than out. Finally, the same measures are hinting at influencing the weekly indicators.
So again, it is not so much the decline, or even the new low of 1.25, but what counts is the context of the move and the pattern in which it is present and the overlay of the shorter and longer termed views.
One thing I would like to make clear, even though the movements are by the 1/16, the same laws of supply and demand, accumulation and distribution, selling pressure and buying pressure are writ here as at much higher levels and velocities. If anything, the patterns are easier to read due to the fact that the waves of buying and selling have more time between the events and one can almost leisurely correlate the intraday chart events to the end of day results.
So my sense of the situation stands. I feel more strongly now that we may be looking at THE turn.
Ed Perry |
