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UPSIDE GAP TWO CROWS The Bearish Upside Gap

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Nilbud   Tuesday, 11/20/12 01:50:40 AM
Re: Nilbud post# 301109
Post # of 2803021 
UPSIDE GAP TWO CROWS The Bearish Upside Gap Two Crows Pattern is a three-candlestick pattern and it signals a top reversal. The first candlestick is a long white candlestick followed by a real body that gaps higher. Then another black real body appears, which opens above the second day’s open and closes under the second day’s close, completing the pattern Recognition Criteria: 1. Market is characterized by uptrend. 2. We see a long white candlestick in the first day that signals the continuation of uptrend. 3. Then we see a black body with a gap up on second day. 4. The third day is characterized by another black candlestick having an opening above the first black day and also closing below the body of the first black day. The body of third day engulfs the body of the first day. 5. The close of the second black candlestick is still above the close of the first long white candlestick. Explanation: The market is in an uptrend and it displays a higher opening with a gap. However the new highs of the day cannot hold and the market forms a black candlestick. However the bulls still comfort themselves by the fact that the close on this black candlestick day is still above the prior day’s close. The third day however increases the bearish sentiment displaying another new high but failing to hold these highs until the close. Also the day closes below the prior day’s close, which is another bearish sign. . So the following question becomes relevant. If the market is so strong, why the new highs fail to hold and why market closes lower? The answer is clear. Market is not now as strong as the bulls would like to believe.

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