September 25, 2010

  • If the day ends like this S&P 500 will complete a Rising three methods candlestick pattern.
  • This pattern appears in a bull market. It is formed with the first day a bullish candle followed by three small black candles and the fifth day a long white candle exceeding the range of day one
  • The pattern formed here is not perfect because Ideally the three small red candles should not exceed the first day's range But it is not a thumb rule.
  • For further reading on rising three methods from: www.Investopedia.com

  • S&P 500 4 hour chart with the important price pivot zone of 1117 - 11128.
  • This band acted as stiff resistance recently. Now that the index broke above this band this zone will act as support on every dip.
  • Index should trade above 1143 to sustain the current up move.
  • Dow Jones futures 4 hour chart showing a clear breakout.
  • Closing the day above 10770 or near the high of the day will be very positive for the bulls.
  • Bears are getting smashed.

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My Favourite Quote

"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore