Hollow Red Hammers
- Posted by Greg Harmon
- on April 24th, 2012
I thought I was out of this phase of life with these Hollow Red Hammers. But Monday in the market was full of them. Not the toy ones above but Japanese Candlestick patterns where, where intraday price action is bullish, with the close higher than the open, a long lower shadow and the close
below the previous day’s close. These can be bullish reversals. Especially when they come after a trend move lower. They represent a final push lower followed by buyers taking control to end the day. You might not think there is any real connection to the toy hammers above but looking deeper there is. On first sight you might not believe that the toy hammer could pound the peg through the hole. You need confirmation. And these Candlesticks also need confirmation, by a follow through day higher, that a reversal is occurring. And these appeared in all the major broad based Equity Index ETF’s, SPDR DJ Industrial Average ETF, $DIA, S&P 500 SPDRs, $SPY, Russell 2000 iShares, $IWM and Powershares QQQ Trust, $QQQ. Well technically the $QQQ printed a Doji, not a hammer but it carries the same importance. A move higher Tuesday in the Indexes will be a bullish sign and likely attract a lot of buying over the next few days. Wait for the confirmation.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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