Thursday, November 19, 2009

Market summary for Nov. 19th

Just a short entry today on the stock market action. First, it is clear we did go up above the 3 year downtrend line I have been discussing in many several previous posts. (see Nov. 14th post) Secondly, the candlestick pattern for all 3 indexes was a "Hammer" pattern. I was looking at the 6 month Dow chart, as shown above and the more easily seen 1 month chart and noticed that this Hammer pattern has not occurred on the way up in the entire 6 month chart. It is easier to see what a Hammer pattern looks like from today's close in the 1 month chart. The significance of the Hammer pattern is that it usually signals the end of a trend. In this case it is the up trend the Dow has had now for many months. Let's see if there is follow through over the next few weeks.

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