S&P 500 Resting With 3 Doji Candlesticks

Thomas Carreno:  The S&P 500 (NYSE:SPY) during the last 3 trading days has printed three doji candlestick formations.  For now I suspect that these three dojis are just a simple pause in the up trend.  There has so far been now hard down reaction after any one of these dojis. 

I have seen several dojis like this cluster before and at least in recent memory a lot of them have simply meant a pause in the trend describing a pattern where prices imply drifts sideways to rest and then finds the uptrend for a new move higher. 

The Russell 2000 (NYSE:IWM) is already well into new high ground, the DJIA (NYSE:DIA) is trying to push to new highs and the S&P 500 is slightly under the old 52 week high. 

I do not see anything immediately bearish about the McClellan summation index at the present time. 

I can see the Russell 2000 supported on a pull back to 838 and the DJIA on a pull back to 12260.  The S&P 500 is still trading above the near term support of 1332 now.  Ideally for the near term continued bullish case it would keep trading above this level either sideways or only slightly down. 

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If I was forced to give a prediction on the next move of the S&P 500 then I would say it looks like it is almost ready to ‘jump the creek’ above the red dotted horizontal line above.  The S&P 500 needs to get a close above this red dotted line to confirm the weekly MACD histogram buy signal.  So far, no confirmation on that yet.

Written By Thomas Carreno From Best Online Trades 

I started Best Online Trades because I really enjoy trading and I also enjoy writing about trading.  Writing about trading or trading strategies helps transfer thoughts that would otherwise stay in ‘theory’ and helps move them to more concrete form for me. And hopefully along the way you will pick up something useful as well.  BestOnlineTrades covers many different aspects of trading, from commodities to stocks, from indices to ETF’s.


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