Weekly Candle Watch

By | March 27, 2015

The S&P 500 Index saw a nice recovery intraday and came away with only a modest loss, but it still remains below its 50 day moving average and the trend line denoted by the January highs. Yesterday’s price action formed a high wave or spinning top candle, one with a narrow opening and closing range and a long upper and lower shadow. It reflects indecision.

3327.S&Pdailychart

3326.Indexweeklychart

The real issue is the weekly candle. At this point in its formation, it looks like a large bearish engulfing candle, and while the indices continue to trend higher on this timeframe, it does have dangerous intermediate term implications. Today’s action needs to change the character of this candle.

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