Reversal Coming Up...
The Dow formed a huge dragon tail formation last Friday and the fact that it occurred right on the 10,000 points support level tells me that the support level would most likely hold out.
A dragon tail formation is a big hammer candlestick signal formed at the end of a significant pullback like the one we got so far. It is a reversal signal that suggests the end of a pullback. In fact, it is an extremely high probability signal especially when formed on significant support levels like this 10,000 points level. In fact, the total equities put call ratio also surged to a high 1.21. The last time the put call ratio hit 1.21, the market rebounded to new highs back in 30 Oct 2009. So, odds definitely favor the upside from now on and I would certainly be looking out for entry points to upside than to downside from now on.
For now, the Dow remains in a short term bear trend and an intermediate term bear trend within a primary bull trend.
A dragon tail formation is a big hammer candlestick signal formed at the end of a significant pullback like the one we got so far. It is a reversal signal that suggests the end of a pullback. In fact, it is an extremely high probability signal especially when formed on significant support levels like this 10,000 points level. In fact, the total equities put call ratio also surged to a high 1.21. The last time the put call ratio hit 1.21, the market rebounded to new highs back in 30 Oct 2009. So, odds definitely favor the upside from now on and I would certainly be looking out for entry points to upside than to downside from now on.
For now, the Dow remains in a short term bear trend and an intermediate term bear trend within a primary bull trend.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
posted by Jason Ng at 6:45 PM
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