Tag Archives: island reversal
Most technical analysis indicators lag prices significantly and most simplistic chart patterns are too obvious to be profitable. Recent price action in GLD is an example of the fate of naive technical analysis.
This blog has warned about a short squeeze coming in gold in this June 11 post. It is interesting how an island reversal, which is a classical chart pattern, invalidated a 50-200 moving average death cross and a descending triangle.
The first sign for that was the price action during the day, yesterday. The market opened higher and prices continued to rise until about noon time when they reversed course and started moving on a downtrend. There are corroborating signs like … Continue reading
Given the proliferation of software tools that identify classical chart patterns, I suspect that many have already spotted the island-bottom reversal in NASDAQ-100 index and QQQ. However, experienced technical traders know that this pattern alone does not guarantee easy money.
Last Monday I reported the formation of an inside day downside breakout pattern in SPY and I showed how that was a bullish signal based on price action analysis. Despite the drop that followed, a long position at the open of last Tuesday has generated a profit of … Continue reading
This new very rare pattern comes right after another rare pattern that I described in a previous post. Actually, the two patterns are separated by just one trading day. It is quite possible that the price action that will follow these two rare patterns … Continue reading