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.

Wednesday, June 8, 2011

Strangely enough, another reversal sign appears

I know it's odd, but even though the market fell 30 plus points today, the pattern formed is actually interpreted by some as a reversal pattern. In candlestick terms it's referred to as an 'engulfing bearish pattern' - a black candle which completely engulfs the 'real body' of the previous white candle after an extended down move. This is seen as the bears' final attempt to drive the market lower. They probably have their stops set at today's high (4649 on XAO). My guess is that if today's high gets taken out you will see some short covering which could turn into a sharp rally. More likely than not, any rally will be short lived.
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