Huge Market Reversal

Licia Leslie

First of all, let’s keep all the people who are being affected by this invasion in our thoughts and prayers.

We as Americans can’t even imagine what it would be like.

In the face of that turmoil, yesterday’s market move was one of the biggest turnaround reversals I’ve ever seen.

The SPDR S&P 500 ETF Trust (Ticker: SPY) was down $11.31 (2.6%) and came roaring back up $18.12, or 4.4%.

The Invesco QQQ Trust (TIcker: QQQ) was down 3.3% and rallied back to close up 3.3% on the day.

Quite the swings.

On Wednesday, I wrote about all the dojis I was seeing in the S&P E-mini futures, gold futures and oil futures.

Remember a doji looks like this:

It is created by the buyers and sellers battling it out, with each side having control during part of the session. That creates the long upper and lower shadows, the white lines.

The real body, which is the green or red part, is the difference between the opening price and the closing price.

A doji has a very small or nonexistent real body. The opening and closing prices are nearly the same, which tells us there has been a tie between the bulls and bears.

Neither side has taken over and this causes uncertainty.

A doji will be found at the top of an uptrend or the bottom of a downtrend.

It can signal a reversal of that trend.

Well, the invasion has negated all those dojis.

This is why waiting for a confirmation the following day is crucial before your market entry.

Engulfed!

Yesterday’s huge reversal has created a lot of bullish engulfing candles.

A bullish engulfing candle will be green or white, meaning an up session, and its real body will completely engulf the previous candle’s entire real body.

This shows the buyers are in control and the up move is likely to continue.

As always, wait for a confirmation the next day before your entry.

Here are several stocks with the bullish engulfing pattern created yesterday.

Salesforce (Ticker: CRM):