The German DAX index printed a strange flash dump on Friday and then gapped up today to print what you might call an Expanded Hanging Man candle.
The Hanging Man is somewhat similar to the Shooting Star but the whipsaw is inverted.
Both are considered bearish but Shooting Star is often more immediately bearish.
The Shooting Star is a sudden push up that quickly whipsaws back down - often to strike higher liquidity above.
Whereas the Hanging Man is the opposite - the "trap door" suddenly opens with a quick impulse down, only for it is quickly bounce back up and recover.
In this instance notice that it slumped to strike higher liquidity below previous resistance.
This is a first weave of that liquidity landmark and may be the start of a reversal.
The reason why I said it was "expanded" is that it didn't recover until it gapped up today.
And so we see different candles to the blended candle in the image.
With that gap up it means there is a gap on the week chart.
As I have said many times; high time frame gaps (mostly week gaps) are often Exhaustion Gaps as part of a reversal.
And so we may see that this gap is the beginning of my favourite "Gap-up-dump-down" shakeout pattern.
Current price is only a small distance higher than resistance and so this is an area of higher liquidity; ideal for a reversal.
So I have considered that perhaps DAX is leading US stock indexes - because it has been the most bullish in this area.
And if it starts rolling over at the key liquidity point then perhaps US stock indexes will follow - wherever they are.
I am making this point because neither S&P or Nasdaq are in ideal liquidity zones in regard to ratio.
But DAX making is slightly higher high, is in an ideal zone of liquidity for a pivot.
So perhaps if DAX rolls over in this area then other indexes including US will follow 🧐.
Not advice
The Hanging Man is somewhat similar to the Shooting Star but the whipsaw is inverted.
Both are considered bearish but Shooting Star is often more immediately bearish.
The Shooting Star is a sudden push up that quickly whipsaws back down - often to strike higher liquidity above.
Whereas the Hanging Man is the opposite - the "trap door" suddenly opens with a quick impulse down, only for it is quickly bounce back up and recover.
In this instance notice that it slumped to strike higher liquidity below previous resistance.
This is a first weave of that liquidity landmark and may be the start of a reversal.
The reason why I said it was "expanded" is that it didn't recover until it gapped up today.
And so we see different candles to the blended candle in the image.
With that gap up it means there is a gap on the week chart.
As I have said many times; high time frame gaps (mostly week gaps) are often Exhaustion Gaps as part of a reversal.
And so we may see that this gap is the beginning of my favourite "Gap-up-dump-down" shakeout pattern.
Current price is only a small distance higher than resistance and so this is an area of higher liquidity; ideal for a reversal.
So I have considered that perhaps DAX is leading US stock indexes - because it has been the most bullish in this area.
And if it starts rolling over at the key liquidity point then perhaps US stock indexes will follow - wherever they are.
I am making this point because neither S&P or Nasdaq are in ideal liquidity zones in regard to ratio.
But DAX making is slightly higher high, is in an ideal zone of liquidity for a pivot.
So perhaps if DAX rolls over in this area then other indexes including US will follow 🧐.
Not advice
Nota
Quite a lot of bearish divergence Nota
DAX - Big gap down and it looks like the next market correction is on.Everyone likes to write there own reviews - but what a call that was!
Now lets see how US stock indexes react.
Bitcoin already in flush mode,
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Your FA guru can't read a chart💭
I run a technical group with lots of content every day + regular videos, 1:1, chatroom 🚀.
Better than all the rest? My record speaks for itself 💡.
Telegram Group: $50 per month✨.
Contact: t.me/dRends35
I run a technical group with lots of content every day + regular videos, 1:1, chatroom 🚀.
Better than all the rest? My record speaks for itself 💡.
Telegram Group: $50 per month✨.
Contact: t.me/dRends35
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.