Evening Star On The Dow!

The Dow ended its relief rally today with a huge, beautifully set up evening star candlestick formation. An evening star formation is a candlestick formation consisting of 3 days... an up day, a neutral day and a down day. This formation is one of the strongest bearish candlestick signal especially when occurring at a strong resistance level (30MA in this case) within a bearish framework and momentum turning south. So, the Dow completed the relief rally that was long overdue, what's next? The next thing all technical analysts are watching is whether the Dow makes a new low or not. A new low would confirm the bear trend and rebounding before making a new low would form a double bottom formation and strong possibility of a trend change. So, let's continue to see what happens. This might be a good time for a conservative put option strategy such as the Bear Put Spread.


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