PCLN Example

PCLN went through the same thing as the market and serves as an example of what I thought was happening and what I think may still happen, it's just a little more extreme and developed.

 On the daily chart we have a series of small bodied candles indicating a loss of bullish momentum, yesterday we had a sort of double whammy candlestick pattern. On Monday there was a hanging man reversal signal, Tuesday a doji which in itself is a type of reversal signal and that Doji fell in the middle of the hanging man's body from the previous day which sets up a 3rd, although poorly formed, Harami reversal. Today PCLN gapped up allowing selling/short selling into strength and trapping bulls, the current position engulfs not only the doji from yesterday, but the hanging man from the day before as well. PCLN could close even higher and still have a very strong reversal/confirmation signal. So I'm watching for the market to close with a similar daily candle like we see in PCLN today.

As for 3C, it's almost exactly the same as the market except this is on a 5 min chart. There was distribution into yesterday's highs and then small accumulation into the close, then the gap up and a failure to hold.

This would be a pretty good spot to try out an initial short on PCLN, especially if we get an intraday bounce to short into on some strength. From the looks of the 1 min chart, I think we will see that intraday bounce along with the market.