Hazard at the top- a spinning top near major resistance

What we have here is a spinning top candlestick pattern for the month of February.  Normally, a spinning top candlestick pattern is just like any other candlestick reversal pattern, it simply offers a possible reversal signal. Nothing is guaranteed and it is merely a precaution.

However, when you have a “monthly” spinning top candlestick pattern at the TOP of an uptrend near the walls of two long-term resistance (formed in year 2000 and 2007), you HAVE to take precaution.  You have to acknowledge that there  may be a greater force in play here.  A force that has soundly defeated the bull in year 2000 & 2007.

The month of March is now the key month to watch.  It may dictate the direction for the rest of the year.  A down month in March may confirm the February spinning top candlestick pattern as a bona-fide reversal signal.  In other words, the walls of resistance are too formidable to overcome.

Look at the SPY monthly chart below:

SPY_Monthly

Did you see the tiny spinning top candlestick bar formed in February?

I will be very mindful of the possibility going into March.  Perhaps a little less tolerance  in  giving the trades more times to establish its uptrend.  Come to think of it, I never have much tolerance with my swing trades anyway except for my position trades.  I’ll be keeping an eyes for ETF such as FAZ, SKF, etc.

Just my 2 cents anyway.

Trade Well!



Categories: SPY

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