Chart shows 2 months with similar candles to the current candle. One instance leads a bull rally. The second leads to several moths "inside" and then breakout to the upside.
Criteria for similarity:
1) Red 2) Low > 21 EMA (third line from top). Note: 200SMA out of scope. 3) candle body contained in top half of candles full range (High - Low)
Match #3 Dow 1929 March candle is a match for ours.
Market rallied 30% higher over 4 months before the red 'candle from hell' sent the market to its bottom
Notice the 3/1929 wick (like our current candle) that ends above the 21EMA
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2 additional 'matches.:
- April 2000. That one went sideways for 6 mnoths and then entered the bear market
- July 2007's candle punches the 21EMA, so that was more bearish than the current candle
Market rallied 30% higher over 4 months before the red 'candle from hell' sent the market to its bottom
Notice the 3/1929 wick (like our current candle) that ends above the 21EMA