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.

Tuesday, June 7, 2011

The 'hope meter' rises

Yesterday's post offered the bulls a tiny bit of hope with the suggestion that the market might find support at around 4625. After today's price action, I am going to move the 'hope meter' up a few notches. In candlestick terms what we got today was a long-legged doji (almost a dragonfly doji), i.e. a candle which opened and closed at the same level and near the high with the low a long way away. This is considered a reversal pattern in its own right (albeit of medium reliability). What would make the hope meter rise even more would be a gap up on the open tomorrow and a higher close or a healthy 'up day' with the close well above the open. Then we could say we have a bottom in place - all the while keeping in mind that we are in a down trend and the trend stays down until the weekly chart reverses. Hey, but that reversal has to start somewhere, doesn't it?
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