Abandoned Baby, from Jim Sogi

June 17, 2011 |

Steve Nison in Candlesticks describes the "Abandoned Baby" pattern where price gaps up, then gaps down the next day.

This occurred two days ago. The pattern was bearish (despite prior drop) according to traditional candlestick theory and modern scientific analysis.

Comments

2 Comments so far

Andre Wallin on June 17, 2011 6:20 am
is it important that the market is in an uptrend for the reversal pattern to apply? does the fact that we’re in a “downtrend” lower the effacacy of the pattern or negate it completely?
Craig Bowles on June 17, 2011 3:39 pm
Joe Granville says moving lower six weeks in a row isn’t normal as we didn’t even do that in 1929. Close to making it seven now. He says he can’t find any time that the market has done this. On another note, the 13-wk vs 39-wk avg spread seems to be a good bubble indicator. Check out the similar highs in 1998, 1999, 2008, and before the flash-crash. Look at oil and all kinds of things and you see similarities to the summer of 2008. For some reason, the bubble seems to get scary when it pulls back to 5%.