Technical Analysis
Island reversal; potential Dow Theory sell signal… What does this mean for our markets? (30 Mar 18)
By Ernest Lim's investing blog  •  March 31, 2018

Dear all,

Besides the headline grabbing news on Facebook and the U.S. China trade tariffs etc. some of you may have noticed other equally interesting / alarming headlines such as the island reversal chart formation seen in Nasdaq 100 (click HERE) and Nasdaq Composite index, and reports that a potential “Dow Theory” sell signal, one of the oldest and arguably the most widely followed market timing tool, may happen anytime (click HERE). What should we do?

Let’s take a closer look at the charts and my personal action plan.

S&P500 closed 2,640. Day range 2,610 – 2,659

Based on Chart 1 below, after S&P500 closed below 200D exponential moving average on 23 Mar 2018, S&P500 staged a sharp 71 point recovery the next day. However, it gave out more than half of the gains by forming a bearish engulfing candle on 27 Mar 2018. ADX has ...

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By Ernest Lim's investing blog
I am an avid investor, trader cum remisier. I am a Chartered Financial Analyst® charterholder, as well as, a Chartered Accountant of Singapore. I have published articles on a wide range of topics on finance and investment, ranging from market / sector outlook, technical analysis and fundamental analysis etc.
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