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notouch

Classic topping pattern on ES

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On the daily ES chart we have a double top and a shooting star candlestick on high volume. This is a classic exhaustion spike pattern. If you look at the SP500 cash charts it's a classic shooting star candlestick. This all points to a pullback or at least consolidation in the days ahead.

 

attachment.php?attachmentid=1503&stc=1&d=1179262076

 

attachment.php?attachmentid=1504&stc=1&d=1179262076

5aa70dd76374b_ES06-0727_02_2007-15_05_2007(Daily)shootingstar.jpg.0d61cc07d13ddc77dcfa3d67fff417c3.jpg

5aa70dd76871c_SP50023_04_2007-15_05_2007(Daily)shootingstar.thumb.jpg.380f99b2f9723f5e3a84c0af3b8e654b.jpg

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notouch,

 

in my opinion this shotting star is not going to work as it uses to cause of the next things that I attach in the chart. please I would like to study my chart and tell me if you see different points. It would be very useful for me.

 

thanks

MX

5aa70dd774b8a_SPDAILY.thumb.png.2f3ceb251d299ab99237fda3bf03a349.png

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High volume on a shooting star suggests trend reversal, not continuation. It shows there was a transfer of stocks from strong holders to weak holders. Anyone who follows VSA can see the bearish implications of that. Like I said though, I wouldn't short this market. It might just be a little pullback before another leg up.

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Nice charts notouch. As a candle trader myself (although I don't use daily charts) there could be a very aggressive short based on your shooting star with high volume. Obviously this would be an aggressive counter-trend trade, but there is a potential setup there for sure. I prefer to see some more bearish conviction before taking a short into that uptrend, but for those willing to be aggressive, I could see a short entry with a stop above the double top.

 

I guess I don't have the stomach or nerve to be shorting into this uptrend until there's some more bearish conviction. Of course, if the short works, getting in now is ideal, but I would not be willing to short just yet based purely on the candle pattern and volume.

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notouch,

 

in my opinion this shotting star is not going to work as it uses to cause of the next things that I attach in the chart. please I would like to study my chart and tell me if you see different points. It would be very useful for me.

 

thanks

MX

 

MX : On the cyan count of your chart dont you have the completion of a 5th wave ? meaning we could call a correction ?... and we have both analisis notouch (candle and volume ) and wave counts in allignment ?...

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In The Last Chart Cause Of I Have A Lot Of Information Inside I Draw The Last Wave Wrongly (the Light Blue One). Based On My Wave Counting Analysis The Correction Of The Past Wave 1 Has Finished (green Wave 2) And A 3rd Wave Is Beggening (green Wave 3).

 

A Shooting Star Seems To Be Formed But I Dont See It As Strict Shooting Star Pattern. For That Reason, This Shooting Star, In My Opinion, Could Be A False Bearish Signal (see The Charts)

5aa70dd78719a_ELLIOTT5.thumb.png.4bb01979d1a84f95dd88caec8a3afb41.png

5aa70dd79081a_shootingstar.thumb.png.818c3a0b7410cee94a9988d1bcdbf581.png

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It's not necessary to look for a "strict" shooting star. That's just nit-picking. In any case, the one that really matters is the cash SP500 which is a strict shooting star. The 0930-1615 ES chart also finished down on the day. What really matters is what price action is telling us, i.e. a lot of new longs entered the market and drove the price up but strong selling drove the price down again.

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Walter The First Chart Of The Past Post Wasnt The One I Wanted To Show You

 

ok I see... now , is it my impression or the second "green" wave its to small ? shouldnt at least have a .38% retracement to be considered a wave ? what metrics do you use to determine a wave ? thanks Walter.

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hi walter,

 

first, sorry for not to answer you earlier but, today it has been a very intensive day and possibly clarifying to know exactly where we are in the markets and what can come next. I have been all day studying the charts and I couldnt replay you so.

 

I have made a new chart for you recounting the elliott waves for the ES. I know that counting elliott can be very confusing if you dont have practice with it. to count waves can seem simple but, believe me, it is really complicated and you have to take in account a lot of things like subways, significative highs and bottoms, retracements, alternation rules, volume bars, fibo levels and so on. and, aswell in different time frames to be sure that coincedes in all of them.

 

the new chart is quite detailed and clear. hope you enjoy it. I attach too a DJ transport daily chart quite clarifying

5aa70dd811b20_GREENWAVE2.thumb.png.e22adc5fb705a58d79caed217892d852.png

5aa70dd81aaab_DJSHOOTING.thumb.png.f10a2f418bbcea6ea1b37e67735432a9.png

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Great analisis MX ¡¡ it really has a lot of clear evidence that we should break up uhhh ¡¡¡ that "shooting star" its really an inverted hammer, as you made prior correction on other post, to be a shooting star it should be higher than previous bar... so yes we will see what happens.... cheers Walter.

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Here's what the Candlestick Man himself (Nison) says about shooting stars:

 

attachment.php?attachmentid=1523&stc=1&d=1179363112

 

So it was a shooting star (but I agree not an ideal one, especially as it wasn't above the previous candlesticks) and we had a little bit of weakness in the morning but it just turned into another buy the dips scenario. The strong close puts the bulls back in charge.

nison.thumb.jpg.c5bb2da5625f850dc907b82aac37bf41.jpg

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Here's what the Candlestick Man himself (Nison) says about shooting stars:

 

attachment.php?attachmentid=1523&stc=1&d=1179363112

 

So it was a shooting star (but I agree not an ideal one, especially as it wasn't above the previous candlesticks) and we had a little bit of weakness in the morning but it just turned into another buy the dips scenario. The strong close puts the bulls back in charge.

 

 

I dont think Nison is the last resource on candlesticks... but the name of this candle varies from shooting star to inverted hammer depending where its situated in comparison to previous bar... classical candle books teach this... the reversal "power" of a shooting star happens really when she is alone on the top...

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I agree with you there walterw. I'm going to do some more research into candlesticks because unlike intraday trading where candlestick patterns are never perfect, on the daily charts candlestick patterns often are perfect. The last big correction was preceeded by the classic three mountain top pattern and the three black crows candlesticks. If this rally ends in a shooting star it will probably be a gap up to new highs then a massive rally to new highs then a decline back to the open.

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