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...
- What I’m Waiting For To Buy Base Metals
- The Must Follow Podcast: JC Parets
- Long Crude Oil and Short Treasury Bonds?
- Fox Business: Time To Jump Into Russia?
- I Like Energy and Emerging Markets for Q2
- Audio: The Current Market Environment
- American Express Approaches Make or Break Point
- Benzinga Fintech Awards Gala April 8th
- BNN Appearance: Crude Oil, Transports & Google
- The Chart The Whole World Is Watching
Archive by Year