Watermelon Wednesday, page-2

Tuesday Evening Liqueurs. 2 August, 2016.

XJO down today -0.84%:



Today's candle is a bearish engulfing candle. That's the first bearish candle in 19 trading days. That's almost a month in real time. A one day event isn't a deal breaker, but it is worth noting.

All indicators turned down on today's events.

I've marked some recent significant ranges on today's chart. (See long black arrows.) The current run-up is about par for a significant up-trend.

CCI is below the mid-line of the Bollinger Bands. I put a lot of weight on the significance of the CCI - probably more than any other indicator. It usually leads on the upside and the downside.

Short term Stochastic (14.3.5) is clearly below the long term Stochastic (50.10.10) which has also turned down. That suggests we'll see more downside.

Consumer Discretionary has been the leader in this recent rally. Today its chart is showing a three day reversal pattern.



CCI shows a negative divergence. Expect more downside.

It's always difficult to know - but this looks to me like the start of a significant pull-back.

RB.