About Those Black Candlesticks
- Posted by JC Parets
- on July 19th, 2012
They’re scary looking aren’t they?
I’ve been on StockTwits over the last week tweeting about these guys showing up in the charts of the US Dollar Index and US Treasury Bond ETFs (see here and here). The thing is that these black candlesticks provide a much more powerful signal when they appear at key resistance levels, as they did here.
For the uninformed, we like to use Japanese Candlestick charts because each individual candle tells us a story. In the case of this evil black one, it indicates strong selling pressure. After a long advance (as has been the case in the US Dollar & Treasuries), a black candle like this can foreshadow a reversal or key turning point.
Candles turn black after a gap higher that can’t hold its gains. Throughout the period of time that the candle represents, prices decline to close below the opening print. But because the new close is still above the previous close, the candle is black and not red.
A rally back above these black candles will negate their bearish implications. But so far, it’s been ugly. Watch these guys.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
- Here’s Why Energy Will Outperform Going Forward
- The Problem Now Is The Overhead Supply
- This Bullish Base In Cotton Is Almost Complete
- Is This Why The S&P500 Stopped Going Up?
- How Low Is Apple Going To Go?
- The Dow Jones Industrial Average And Its 200 Day Moving Average
- It’s Almost Time To Buy Crude Oil Again
- Is Healthcare Due For A Collapse?
- Are Emerging Markets In Trouble?
- A Look At The Euro From The Top/Down
Archive by Year