Are Financial Markets Ready For a Reversal?

5-22-2013

First I want to Recap today's trading today in U.S. session:

Today was a great day as we took down several trades to get us a nice profit. It was volatile as Bernanke testified earlier in the day. This caused a short squeeze in the EUR/USD following by fast and aggressive selling.  Later in the day we had the FOMC minutes. Stocks closed negative on Wednesday as investors were worried on Fed tapering QE. Bernanke's speech and FOMC minutes leave the theory in mind that the Fed will be ending Bond buying soon. Wall Street finished the day in losses after retracing from fresh new highs.

All major sectors had a reversal with the Dow experiencing a 234 point reversal from its intraday high.  Utilities, Energy, and Materials led markets lower,  Gold and Crude Oil are lower.

Bernanke said the Fed’s monetary stimulus plan is helping the U.S. economy recover, and offered no sign that he is ready to retreat from the Fed’s latest round of bond buying.  FOMC officials also said more progress in the labor market is needed before deciding to slow the pace of asset purchases.
The Dow was down 80.41 points or 0.52%. The S&P 500 down 0.83%.  So what does this tell us about the markets? Well from the look of these intraday candles I think it is safe to assume we correct further into the week.

Today may end up being a key day, we will see. I have reversal candles on different charts at the moment.

Important: Our close on the was at our lows today, this is one of the things I look for when spotting reversals.
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