Today we saw an attempt at a rally following last Friday's negative action. Things were looking good until around 2 PM when all the day's gains evaporated leaving us with a gravestone doji. However, note that while a GS doji in an uptrend is a bearish pattern, a GS in a downtrend is bullish. Note also that the indicators are starting to look oversold. The RSI in particular has declined to its lowest level since last August just before the big uptrend began. But volume today was lighter than yesterday. Go figure.
In addition, we remain firmly in the descending RTC established on 11/5. On that basis alone, I have to leave the red trend arrow in place. So where does this leave us? The bullish gravestone doji is a pretty rare pattern. I went back through 10 years of daily Dow charts without finding another one like today's. The next support level int he Dow is at 11,150 and the lower Bollinger band isn't til 10,971. Today is one of those indecisive days where I can't figure out which hat to put on tomorrow. Either the bearish RTC trend continues, or we see an uptick motivated by the GS doji. There's really no way to tell so I will continue to stand aside.
Trades
Today I bought another 100 shares of DHY. I figure for a total investment of $293, how wrong can I be? Other than that, I will wait until I see evidence of a turnaround before committing more money to this market.
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