Monday, April 16, 2012

Target reached on Nasdaq 100

The target on the "Double Top" pattern on the Nasdaq 100 was reached today.  This is not a reversal signal.  It is an initial profit taking target.  I have marked the next level of support below with a grey trendline on the daily chart.  Let's see what pattern develops next...

(Click on chart to expand)

I included on the left hand side an interesting Japanese Candlestick pattern with confirmation known as a bearish "Shooting Star" on the 5 minute chart today.  What is interesting about this reversal candlestick is how it took place in a location that probably had a bunch of "buy stops" gathered.  I believe this location was a target for high frequency traders in the early afternoon once it was clear the supply side pressure had subsided.  The JC pattern shows there was nobody left to keep pushing prices higher. 

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