Influential Confluence
When a confluence of indicators occurs, it can make your job as a trader a
lot easier. While one indicator is sometimes enough to do the job, when you see
two, three, or more lining up, the resulting move can be powerful.
How many do you see in this chart of the Biotech HOLDRs? Here’s what I see:
1. An inability to close decisively above the 50-day moving
average.
2. Resistance at the gap area.
3. .618 Fib retracement from the Aug. 27 high to the Sept. 21 low.
4. Live angle resistance, beginning in July.
Not only that, but this was an engulfing bar, and today’s high nearly matched
yesterday’s. This all adds up to a change in trend.
The result was a wide-range-bar down. BBH closed down 4.99 today, at 112.
Look for lower prices tomorrow.