Yesterday, (May 22) the SP 500 index ended with a long legged doji candlestick, as shown on the chart below. The open was 316.09 and the close was 1316.63 so the real body was very small; while the day’s range vacillated from 1328 to 1310. Today (5/23) was a high wave where again the day’s range was large from 1320 to1296 with a long lower shadow, but the real body was fairly small, opening at 1316.02 and closing at 1318.86. You could also call today a hammer, but ideally you should not see any upper shadow. For both days, the price traded well above and/or below the opening and closing prices. This is indecision, but a multi-day pattern of these types of candlesticks at the bottom of a downtrend, signal a possible reversal in trend.
The market has managed to stay above the 200 ema for the last three days, after falling below last Thursday and Friday. Still I can’t help wondering; as the market briefly touched 1291.98 at the low last Friday, May 18, that the low end has not really been tested. This is just shy of a 0.50 retracement fibonacci projection coming in at 1290.52, (based on the preceding major wave) so I would expect to see more of a test than a fleeting encounter. So, I have to doubt if we have really seen the lows. A 0.618 retracement fibonacci projection would put the bottom and reversal point near 1259.41 and is certainly not out of the question, considering the unsettling news every day from Europe and Greece. Let’s see how Thursday opens. Thanks for reading.
The market has managed to stay above the 200 ema for the last three days, after falling below last Thursday and Friday. Still I can’t help wondering; as the market briefly touched 1291.98 at the low last Friday, May 18, that the low end has not really been tested. This is just shy of a 0.50 retracement fibonacci projection coming in at 1290.52, (based on the preceding major wave) so I would expect to see more of a test than a fleeting encounter. So, I have to doubt if we have really seen the lows. A 0.618 retracement fibonacci projection would put the bottom and reversal point near 1259.41 and is certainly not out of the question, considering the unsettling news every day from Europe and Greece. Let’s see how Thursday opens. Thanks for reading.
