SPX Hammer Candle Pattern

SPX 500
We didn't get the Swing Day Trade we expected but the Market has put in a better signal.
This is a Reversal Candle Hammer Pattern
We will see how this plays out for the rest of the week.

Market TAO Thurs 7-23-09

ES Futures overnight gave us this Pattern.... an Ending Diagonal .....a Reversal Pattern.

These appear at the end of a very strong rally signaling a reversal.

It's not finished yet . Typically these patterns end with a spike over throw to the top and then fail that could happen today or tomorrow.

Still have my PUTS on from 2 days ago and will add more at the top op the spike.....use a tight stop because as
crazy as this market has been it could just keep on going up forever! :P


Apparently Mr Market decided this was an Ascending Triangle and we got a Big Breakout .

Usually a Triangle is a Wave 4 Structure and and the top of the wave 5 happens very fast.

It looks like this maybe the end of wave 5 .

Now we should see an ABC Retracement down to the Apex of the Triangle

Evening Star Candle Pattern

Spy 30 min chart

After a huge rally over the past 4 days it can take more than one reversal candle pattern to turn thing around..

Here there 3 patterns.


1 . Evening Star to stop the rally and send it sideways.

2. An Engulfing red candle to hold it down.

3. a Hammer with a red Dark cloud cover to knock it out!

All rapped up in a Keltner Channel
notice the extreme deviation of the evening star followed by the piercing and rejection of the hammer wick on the upper channel line.

As a day trade approach, candle formations are only reliable for 7 to 16 candles after the formation develops and it is necessary to remain on the same time frame. This one is a 30 min candle pattern