Wednesday, January 19, 2011

NASDAQ - Bearish Engulfment


Today the NASDAQ opened higher but finished on its lows forming a bearish engulfment pattern. A bearish engulfment is a reversal pattern and suggests that we may see a pullback over the next week or so.

The last time the NASDAQ had a bearsih engulfment was in November and the market subsequently sold off as can be seen in the above chart. Given the overbought condition of the market, I expect a pullback here and the bearish engulfment might be the trigger for such an event. The bearish engulfmetn pattern will be confirmed if today''s low is taken out tomorrow.


4 comments:

704set said...

Is the the engulfment confirmed if teh low is taken out during the day or on the close?

ben said...

You have an uncanny ability to be right. You advise that the market would continue to go up. It did - and it went up beyond many peope's expectation. It confirms that traders will go broke by trying to pick market top.

absarforex said...

good information on this blog.nice job

Anonymous said...

Good call Kevin. Keep them coming. I covered yesterday and reshorted some today. However, I had shorts opened since 1/3/11. Some worked, some didn't.
Jack

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