on the inverted hammer, from the candlestick guru steve
nison, he says it is important to wait for bullish
verification the next day. That could be in the form of a gap . The
larger the gap the stronger the confirmation.A white candlestick
with higher prices can also be another form of
confirmation.
A simple question that may have a complicated answer.
From today's SPX chart, I see an opening that looks manipulated.
What makes the difference of a gap versus an open within two
cents! of the previous close that is followed three minutes later
by the day's high, almost 2% higher?
If the open was more like the high, then a different candle. But
that's not the point.
Based on what Ameritrade told me the other day -- that the open
of the S&P is misleading because many stocks actually open for
trading a few minutes later I wonder if we should ignore an S&P
candle where the open is an important part of it?? Maybe this SPY
candle should be taken as the "real" one -- it sure looks
more like what the day felt like. Thoughts?
Posted by philosoraptor on 23rd of Aug 2011 at 09:39 am
Brian, I completely agree with you but would add one small but
potentially important detail - yesterday's close was higher than
the previous day's close.
Therefore, using TradeStation's 'candlesticks with trend'
charting, you get a solid green candle on SPY i.e. a down day
intra-day but a higher close than the previous day. In other words,
a 'false' up day. Such a nuanced understanding might be
significant...
Posted by philosoraptor on 23rd of Aug 2011 at 09:46 am
To clarify, solid green rather than the normal hollow green. See
chart below. The inverse applies to 'false' down days i.e. hollow
red candles rather than solid red candles with intraday price
action bullish although closing lower than the previous day.
Good point -- I think all programs should be converted to the
StockCharts style of 4 styles of candles based on the day to day
and intraday price moves. Anyone have Steve Nison's ear?
SPX Daily (Inverted Hammer Candle)
Posted by steve on 22nd of Aug 2011 at 05:44 pm
$SPX
http://www.fxwords.com/b/bullish-inverted-hammer-candlestick.html
http://breakpointtrades.com/market_lab/index.php/patterns/detail/inverted_hammer/
This is a low probability reversal pattern and thus needs confirmation.
inverted hammer
Posted by rkelman on 22nd of Aug 2011 at 11:40 pm
on the inverted hammer, from the candlestick guru steve nison, he says it is important to wait for bullish verification the next day. That could be in the form of a gap . The larger the gap the stronger the confirmation.A white candlestick with higher prices can also be another form of confirmation.
r
(Inverted Hammer) Open vs. Gap, for Steve
Posted by cubby on 22nd of Aug 2011 at 10:11 pm
A simple question that may have a complicated answer.
From today's SPX chart, I see an opening that looks manipulated.
What makes the difference of a gap versus an open within two cents! of the previous close that is followed three minutes later by the day's high, almost 2% higher?
If the open was more like the high, then a different candle. But that's not the point.
Thanks for any help Steve
cubby - wish I could
Posted by steve on 22nd of Aug 2011 at 10:17 pm
cubby - wish I could be or more assistance but I don't make the candles. I simply interpret them once complete.
Steve and cubby re: S&P candle
Posted by bkout3 on 23rd of Aug 2011 at 09:06 am
Based on what Ameritrade told me the other day -- that the open of the S&P is misleading because many stocks actually open for trading a few minutes later I wonder if we should ignore an S&P candle where the open is an important part of it?? Maybe this SPY candle should be taken as the "real" one -- it sure looks more like what the day felt like. Thoughts?
bkout - that seems reasonable
Posted by steve on 23rd of Aug 2011 at 09:14 am
bkout - that seems reasonable to me.
Brian, I completely agree with
Posted by philosoraptor on 23rd of Aug 2011 at 09:39 am
Brian, I completely agree with you but would add one small but potentially important detail - yesterday's close was higher than the previous day's close.
Therefore, using TradeStation's 'candlesticks with trend' charting, you get a solid green candle on SPY i.e. a down day intra-day but a higher close than the previous day. In other words, a 'false' up day. Such a nuanced understanding might be significant...
To clarify, solid green rather
Posted by philosoraptor on 23rd of Aug 2011 at 09:46 am
To clarify, solid green rather than the normal hollow green. See chart below. The inverse applies to 'false' down days i.e. hollow red candles rather than solid red candles with intraday price action bullish although closing lower than the previous day.
Good point -- I think
Posted by bkout3 on 23rd of Aug 2011 at 09:46 am
Good point -- I think all programs should be converted to the StockCharts style of 4 styles of candles based on the day to day and intraday price moves. Anyone have Steve Nison's ear?
Steve, thank you for the candlestick website. Highly recommended !
Posted by chas on 22nd of Aug 2011 at 09:30 pm
For traders who need more education - like me. Here is a great website for researching and learning candlesticks.
It is a must see. Thanks again.
http://www.fxwords.com/b/bullish-inverted-hammer-candlestick.html