We may now have seen the second installment of bad news for stocks. The “outside down day” which was put in by the Dow Industrials on June 15 was also a “bearish engulfing” pattern – in spades – because it engulfed the “real bodies” of the nine days which preceded it. This is at least as bearish a pattern as I have ever seen.
The kicker was the Weekly price bar of the Dow Industrials for last week, which was the third bar of a three-bar Evening Star pattern, which is bearish.
Dow prices declined 200 points yesterday, which equates to a bad start for the week, and may be the start of fulfillment of the negative implications of the nine-bar bearish engulfing pattern which was followed up by the Evening Star.
We would not be at all surprised if the stock market were to take a bad tumble this week.
William Kurtz June 23, 2009 http://www.candelaabra.com http://www.candlewave.com
