The week in retrospect
The XJO continued its steep ascent the first three days of last week. Just when it seemed that the correction would be delayed another week, sellers hit the market on Thursday 21st February 2013, driving the index sharply lower by 96 points to finish the day at 4980.
The expectation was for further falls on Friday but instead buyers rallied the market for the XJO to close the week above the 5000 resistance level at 5018.1
The spinning Top Candlestick
A “spinning top” candlestick appearance is shown on the weekly chart. This term describes an appearance in which there is a small real body (there was just a 15.8 point decline in the index for the week) but long shadows at the top and bottom. Both buyers and sellers took control for a time. but could not sustain a greater advancement. There was indecision by traders and the net outcome was neutral.
The retracement was less than many expected, but it respected support at 5000 suggesting continuation of the up-trend next week.
- Weekly Market Wrap: February 22, 2013 (forbes.com)
- Does Today’s Bounce Mean It’s Back to Normal for 2013 Market Rally? (t3live.com)
- Today’s Top Economic News – 22 February 2013 (focuseconomics.wordpress.com)
- NASDAQ Futures Forecast February 22, 2013, Technical Analysis (forextv.com)