The market opened a little higher as expected and closed in what is called, a "Hanging Man". Even though it closed higher, climbing all the way up from under 3000 points during lunch-time, the "Hanging Man" is a bad sign especially when it appears after an engulfing dark cloud yesterday. Like a ghostly figure in the air, the "Hanging Man" is a signal that the reversal is near.
The bears are gaining control of the market. We saw it crash at mid-day and fortunately climbing all the way back up from 3pm. This could be due to buy-backs to stablise the market. Even though buy-backs work for large investors of particular counters and company treasuries trying to kept the price afloat, it generally does have a lasting effect on the general market.
Today's, "Hanging Man" was a small stubby white candle with a long bottom wick. Some may think it is a "Hammer" but "Hammers" appear at downswings. In this case, the market was up these few days and so this little candle is a "Hanging Man". The last 2 "Hanging Men" appeared in October 2007 and December 2007. These were around the pinnacles of the the previous peaks. However, due to the fluctuations at the peaks, the market did not crash immediately the day after appearance the "Hanging Men".
On the above basis, it is rather hard to tell what is going to happen tomorrow. There is a likelihood of the market opening up or down and there is likelihood of it closing higher or lower. Regardless of which, the idea is to cash out soon before the big dip. You did rather take a small loss than a bigger one.
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