SPY Friday Technical Talk
- Posted by Greg Harmon
- on August 1st, 2014
The SPY ended the day with what is called a Spinning Top Doji. A Spinning Top is a Japanese candlestick where the real body (colored section of candle) is very small and the shadows (sticks on the end of the real body) are long and similar in length. This is a candle that shows indecision. It is often though to be a reversal signal, but indecision means it could go either way. But there are 3 other technical indicators that suggest a reversal may occur. First the Doji happened right at the rising support line from February. Next the price is out of the Bollinger bands, indicating it is oversold on a volatility basis. And third the Doji came on strong volume and similar to the volume from Thursday.
I will discuss this and other aspects in the Macro Review this Weekend, but if you see a reversal higher Monday now you will not be surprised
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)