No Eveningstar on the S&P 500 Chart

By | January 27, 2017

The DJIA held above the 20,000 level in Friday’s flat session and the S&P 500 didn’t form an eveningstar pattern. There was some speculation among (bearish) traders that an eveningstar was under construction on the S&P 500 daily chart, with Thursday’s narrow range doji candle forming after a larger white candle, and Friday’s weak open. The Friday close, however, was near the mid-range of the session and the resulting candle did not fit the three-day pattern of strong up day, followed by narrow opening and closing range doji, and completed by a strong down day. A pullback to the 2280 to 2270 area is certainly possible over the short term but with the RSI below its oversold level and Chaikin money flow well into positive territory, there are no signs of a significant reversal on this chart.

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