Friday, September 24, 2010

Rising Three Methods - In Real Life

There are lots of great names for Japanese Candlestick patterns, 3 White Advancing Soldiers, Marubozu, Hanging Man, Hammer and my favorite Dragonfly Doji. We have seen a lot of them lately but this week presented a very bullish pattern that we have not seen in a while in the indexes, Rising Three Methods. This is a 5 candle bullish continuation pattern. The first candle is a long white (or green) candle. The next 3 are descending red candles that are contained within the first white candle. The final candle is another long white candle that closes above the first candle.

The Rising Three Methods is about to be confirmed today in the December e-Mini Futures. This chart is as of about 2:00pm Friday. Technically the shadows on the down days should not go outside of the range of the first white candle, but it is most important that the lower shadows do not breach. That is the case here.

If the Futures close above 1136.50 today the pattern will complete and will be a very bullish signal. Right now it looks likely. Watch 1136.50.

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