SPX Candlestick

Remember the "Daily Wrap" yesterday in which I posted several SPX charts regarding possibilities or different configurations that I thought to be most probable? The chart from the post in which I drew in yesterday's closing candlestick and then drew to the right of it, what I suspected today's might look like, was this chart with the following comments about the chart as well.

" I drew in several different bullish reversal variations for a daily candle as the downside is losing momentum and T.A. traders are going to expect a test of resistance soon. The next candle to be a bullish reversal confirmation (look for increased volume) can be a star which is the first from the top and to the right of today, the second is a Doji star, it is essentially telling you there is equilibrium between bulls and bears that's a change of character and usually a good reversal candle. The third down is a bullish hammer, it doesn't matter if its body is filled or open, as long as the lower wick is at least 2x as long as the body. The last is very bullish, it's a Bullish "Engulfing" candle and opens at a gap low and closes near its high, swallowing the previous day's candle.

Note in every example I drew a small yellow trendline representing today's lows, probabilities are high that intraday trade breaks those lows as I have depicted in every variation, that's our head fake shakeout."

Thus far this morning, we aren't far off from the general concept of those possibilities, here are just a few of the possibilities we can create from here for a bullish reversal candle.

The first concept that has already come true was the most important one for a reversal that I laid out in bold print last night, 

"Note in every example I drew a small yellow trendline representing today's lows, probabilities are high that intraday trade breaks those lows as I have depicted in every variation, that's our head fake shakeout."

That has already happened so from here we can still make a bullish hammer, a sort of bullish Engulfing candle or even a plain doji star would work, the point is, the ROC I mentioned yesterday (downside momentum fading) is all a part of the reversal process in creating this sort of true parabola (like a ladies long necklace rather than the parabolic move).

I'm still not impressed by the charts for the most part, although they do lean toward the probabilities we expect, they still remain the weakest of all recent cycles I can recall, it's the price pattern and the amount of confirmation if anything that looks to solidify the probabilities. I have made no secret that I believed we would see this and that we will continue to see this as true "Risk taking" is very hesitant now to commit to anything significant.

However, the larger view (rather than intraday) is coming along thus far. Whether there are assets strong enough to hitch hike a ride higher before abandoning them at a small gain and entering core short positions for the super-cycle or not is still up in the air. It's never a matter of probabilities, it's always a matter of high probabilities, low risk, an excellent entry and the best timing possible, THAT'S OUR EDGE, NOT THE PROBABILITY OF UP OR DOWN.