Daily Archives: November 2, 2012

Bearish Engulfing Candlestick Patterns

By -

QQQ daily 6
SPY daily 6

The SPY & QQQ both put in Bearish Engulfing Candlesticks
at the close today.  Looking at the previous similar patterns circled on the QQQ daily chart above, both were
followed up by a substantial gap down the following day (one on a
Friday, the other on a Monday).  Therefore, although I can't give
specific investment advice, I can tell you that I certainly won't be
trying to buy the gap down if we happen to get one on Monday.  On the contrary, I
will most likely deploy what little dry powder I have left after adding
to my short positions yesterday and today.
-RP