I just had to show you a classic reversal setup that I saw last night.
SPY
In the chart you can see a Doji bar setup where there is also a 20-day extreme in price. Here it’s a price high, in other words, the SPY is making a 20-day high with the Doji bar. A Doji bar is one where the open and close are very near each other in the context of the overall bar.
This is a classic reversal setup and indeed the SPY has reversed today, just as it did on 6th July following a similar Doji bar setup the day before.
The only problem with both reversals was that both gapped down, meaning we couldn’t get our trade activated. However, it does go to show the power of the pattern and in most cases we can get our trade activated.
DIA
Virtually identical looking to the SPY.
For those of you who aren’t already using my Turnaround-Trader method, I’m holding a webinar on Wednesday next week to show you how well the strategy can work.
All the best
Guy Cohen