It is very rare that we receive the benefit of a multiplicity of Candlestick Trend Reversal Warning Patterns, one after the other, one of which predicts an immediate (i.e., literally within minutes) reversal and others, which appear as of the end of the trading day, which predict a longer-term downturn. Today was one of those days which produced a veritable cornucopia of Trend Reversal Warning Patterns, in various time frames, in Apple Inc. shares.
They are notable, also, in that it is quite probable that they marked the top end of a long counter-trend rally in the general market – a rally which had its inception on October 4, 2012 – and, therefore, also marked a return of the supervening underlying Bearish trend which took root in October 2007.
The 10-minute chart shows the Bearish Engulfing Pattern which arose shortly after Noon today. It arose at the top of a long uptrend, which is a requirement for the pattern. We see that a black candle completely “engulfed” the white candle which preceded it. At the same time, our Indicators were signaling the strong likelihood of a reversal, thereby confirming the legitimacy of the pattern. Within 40 minutes after the appearance of the pattern, the price of Apple shares had plummeted about $17 per share.
By the close of trading today, Apple shares had lost 2.31% of their value, day-to-day; and several additional Trend Reversal Warning Patterns had appeared, which predict an even more substantial price decline than the one we’ve seen today: (1) a a Candlestick Bearish Engulfing Pattern in the 180-minute chart – in which the Real Body of the tall black candle bearishly engulfed the Real Bodies of the seven price bars which preceded it; (2) a High Wave Spinning Top (which is a bearish signal) in the 240-minute chart; (3) a Bearish Engulfing Pattern in the 360-minute chart – in which the Real Body of the tall black candle bearishly engulfed the Real Bodies of the four price bars which preceded it; (4) a Bearish Engulfing Pattern in the Daily chart – in which the Real Body of the tall black candle bearishly engulfed the Real Bodies of the two price bars which preceded it; and (5) a Shooting Star Pattern (which is bearish) in the Weekly chart.
It was a rare day indeed. The Candlestick Bearish Engulfing Trend Reversal Pattern in the 10-minute chart accurately foretold the massive sell-off which began within minutes of its appearance; and the patterns in the longer-term charts predict a much greater decline to follow.
William Kurtz
http://www.CandlesticksOnSteroids.com
February 15, 2012
