Friday, November 27, 2009
Bearish Island Reversal in Place
Thanks to blog reader, JD, for pointing out that today's gap down in the stock market leaves a bearish island reversal in place right now (click here for JD's comments). As you can see from the attached S&P and Dow charts, the up gap from Monday was followed by a down gap today which is a classic reversal pattern from the previous trend. This is just more evidence of a short term top forming; and when combined with the longer term evidence it suggests that perhaps a major top is already in the stock market.
Thanks a lot JD for sharing that insight with us!