Wednesday, May 26, 2010

Takuri

The S&P Cash 'hammered' out a classic takuri candlestick at Tuesday's close. The fact that the market dipped below the February 5th low (1044.50) and then rebounded to close near the day's high is highly indicative of some sort of short term low being established. Plenty of longs were stopped in the morning by the vultures so there is incentive for the street to have a bounce. 'Flash traders' and 'dark poolers' love this scenario.
The market is entering a stage where a short term--albeit impressive--rally may ensue at any time. Don't be seduced--use the temporary withdrawal of the bear's ferocity to strategize--especially if trading options. The moving averages should reveal when the bear will return--this time with a vengeance.

The chart indicates:
  • 21,55 & 200 exponential moving averages.
  • Natural Support and Resistance fan-lines
  • Harmonic Price levels
  • June Energy Dates.
right click to enlarge

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