This week we have had three closes below the June low. Today’s and yesterday’s close were variations on spinning tops. Spinning tops present as small bodies with long wicks or tails. Typically, this candlestick form denotes uncertainty in the market. It is also worth noting that today’s high and low are inside yesterday’s high and low. Again, this is a multi-candle pattern that suggests uncertainty in the market. For the RSI and MACD, we see them crossing back below their signal lines, a bearish indication.
Moving over to the weekly chart, we see that today’s close is in line with the close two weeks ago. We also see that last week’s rally was not one the bulls could sustain, hence the small body and long wick to the upside.
As for my trading, I am looking to enter more short positions once SPX breaks yesterday’s (10/11/2022) low. I believe there might be some good opportunities in the XLU and XLB.