Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: marc chatman who wrote (35907)	3/4/1998 8:16:00 AM
From: donald sew	Read Replies (1) \| Respond to of 58727

Marc, I now use about 12 different indicators, so I do not just rely on the Candlesticks. You are correct that the candles had hammers which indicate a possible reversal to the upside, but all my other indicators show that they are now in the lower mid-range and there is still downside room. Yesterday was the buy-in day for the SOX with a weak CLASS buy signal, and it closed up 7 points off its bottom. That action brought the SOX back into the lower mid-range, but since it did not go positive, it still has a downside bias. I am strongly against using one indicator, so there is no way to reconcile the candlestick with the futures, except to say the the candles are wrong. This is not to say that the market cant go up today, which then the candles would be right, but your specific question was to reconcile it with the futures; therefore if you use the futures as a true indication of how the market will do today then the candles are wrong. When I use candles, I try to use them in patterns of more than one day. You are correct that as a singular pattern the HAMMER is a reversal signal. However if you notice that there were only 2 down days prior to yesterday's hammer. That is normally not enough time to determine a short-term trend in candlesticks. I normally use 4-5 days. When I saw the HAMMER last night, I basicly discounted it since the downtrend was not long enough, and then my other indicators showed that there were futher downside and the bias still down. I may have thought differently if the SOX had closed positive, which would have made it a white hammer and my other indicators may have indicated that the bias changed. I realize the text book says white or black does not matter - its a fine line. Seeya Hope I was of help. Seeya