Chart of the Day - Thursday, November 9, 2023

Today’s Chart of the Day was shared by Adam Koós (@AdamKoos). The S&P 500 snapped an eight-day winning streak today, printing a bearish engulfing candle. This reversal candle suggests an exhaustion of the near-term uptrend. While this pattern tells us to anticipate weakness in the coming days, daily candlestick patterns have little relevance to long-term trends. The simplest definition of an uptrend is a series of higher highs and higher lows. Adam points out that the S&P 500 achieved a higher high this week before today's reversal. The next thing bulls need to see is a higher low...ideally above the 200-day moving average. A higher low would also create the right shoulder of a potential head & shoulders bottom.