Value of Perfect Information

SPY 30 min chart

After a huge rally over the past 4 days it can take more than one reversal candle pattern to turn things 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 developes and it is necessary to remain on the same time frame. This one is a 30 min candle pattern.

Categories: Markets