I am not a financial adviser so you should not take any part of this blog as being financial advice. Observing and interpreting charts is a hobby and so is this blog. The information in this blog is just my opinion, it may not reflect reality. Stock market investing is risky - you can lose all, or potentially more than all of your money given certain market conditions. Not only can you lose a lot of money buying shares, you can also lose a lot of potential profits by selling shares at the wrong time. So please do not buy or sell shares because of information in this blog. Whether you buy or sell shares is your decision as is the decision when to buy and sell. Do not risk any money you cannot afford to lose. Do not risk any money if you do not fully know and understand what you are doing.

Thursday, May 19, 2011

US market confirms reversal


The S&P500 futures produced a clear reversal pattern last night - a 'three river morning star' candlestick pattern. It is composed of a white and black candle with a star between them. See diagram to the left which also shows the past three days price movement on the S&P. This signal is usually very bullish so its reasonable to expect at least some follow through.


Our own market followed through nicely today, but the thing to remember is we are still in a downtrend (XAO Indicator is red) so we should probably continue to view this as a bear market rally. That rally has now reached the first resistance level. The next one is at around 4890. If I see signs of the rally becoming exhausted I will endeavour to post about them here. 
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