We knew that the June 3 close of 1300.18 was a confirmed DOUBLE BREAKDOWN of both the Double Top (horizontal red line) and the Falling Wedge (Blue trendline #2-#4). The open (and high of the session) on June 6 was about a point below Blue trendline #2-#4, which was a validated trendline, and down she went. The trendline validation is the green up arrow on May 23.
As we know, when validated trendlines get taken out, that usually has "some" significance. In this case, the significance was the the Symmetrical Triangle target of 1291.18 (that pattern broke down on May 16)and the Double Top target of 1278.40 both got MADE.
After validated trendline #2-#4 got broken to the downside, "former support 'should' act as resistance" on any rally. We can see that the June 14 rally got to within less than one point of that trendline.
Any trading back above broken trendline #2-#4 would be a "knuckle-biter" for The Bears because that would put trading back inside the broken Falling Wedge and put the very short-term outlook at Neutral. The Bears' job after the June 14 close was: (1) to defend broken support (trendline #2-#4) and prove that "former support now is resistance," and (2) eventually to take out the 1265.64 low of the June 13 "bullish looking" Doji Star Hammer.
The Bears accomplished both tasks in yesterday's session.
The Bears clearly are in control at this point. Their next order of business is some kind of test of the March 16 low of the Rising Channel, 1249.05, which still is IN PLAY.
4 comments:
Hi Melf . .I follow you. I marked up the chart and printed it out so I could reference it easily all day. Thank you :-) I have one question on the chart that I can't figure out. I know you get busy so if/when you have time I am curious about one of your numbers as I like to learn. Pat to sweet Ryder.
http://i.imgur.com/zrFqH.png
Mary
Good Morning, Mary,
I answered your question at the FCX board. Ryder sends lickies ;)
Have a great day!
Hi Melf,
I have a question about FCX' chart pattern the last few days.
1)
Today, do you see a "Bullish Long Legged Doji Pattern, and is this a bullish reversal pattern that may mark a potential change in trend. If yes is its reliability not very high?
2)
Did the last two candlesticks form a Bullish (Doji) Star Pattern?
Good Morning, Jim,
(1) In the past two months, FCX has had three Doji Star Hammers with "long-leggedness" (LOL)somewhat similar to yesterday's Long-Legged Doji Star. All of them were good for at least "some" rally. We'll look at those in this morning's post.
(2) Yesterday was a Doji Star. We can't say that it's a Bullish Doji Star unless we see follow-thru on the upside.
Two days ago was a black candle, so I'm not sure what you mean by "the last two candlesticks."
Have a great day!
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