Today a Long White Candlestick was formed. This shows that the prices advanced significantly from open to close during the day under strong buying pressure.

A bullish pattern has developed and a BUY-IF alert is issued today. You will see if we erred slightly in the previous SELL signal. A confirmation in the next session may mean that we have underestimated the bullish power of the market. The task is now to confirm the validity of this bullish pattern. We will guide you through this process but the prime star of this game is nobody but you. First you must do your homework. A good starting point may be to keep an eye on after-hours and futures trading to get preliminary hints about the direction of the market. Related news, events, economic data, and the world stock markets should also be closely followed prior to confirmation session.

There are three possible cases of confirmation. You have to follow the next session carefully to check if these cases will hold or not:

The market opens with an upward gap, signaling a bullish sentiment in the first case. Your benchmark will be the opening price. If the prices stay over the benchmark, go long. Any white candlestick with an upward gap is a valid confirmation criterion.

In the second case, the market opens at a level, equal to or below the previous day’s close. The benchmark is that closing price. If prices during the session stay over the benchmark, go long. Any white candlestick closing above the previous day’s close is the second confirmation criterion.

If, however, in both cases, the prices during the session start coming below the benchmark, avoid buying. Sell if you feel a definite tendency in prices to close the day below the benchmark.

The third case of confirmation is rarely observed. The market opens with a big downward gap suggesting a very bearish day, and the day ends with a long white candlestick, but still closing below the previous day’s close. However, such a day satisfies the third confirmation criterion and in this case the closing price of the long white candlestick will be taken as the price of confirmation.

If one of the three confirmation criteria is not fulfilled, or in case of a black candlestick or a doji on the confirmation day, the BUY-IF alert remains valid, however without confirmation and the three confirmation criteria are then sought in the following day. The only exception is the long black candlestick. Any long black candlestick following a BUY-IF alert makes it (the signal) void and invalid.

Do not consider any new short positions given the bullish alert and the recent bullish momentum. Short sellers must cover their positions to prevent further losses, if the market confirms the BUY-IF signal.

(http://www.americanbulls.com/StockPage.asp?CompanyTicker=MRVL&MarketTicker=NASD&TYP=S)

Market Recap:

My observation:

1. This week we will have a lot of reports coming out, and the market will be impacted a lot by these reports results and the direction of the market will be affected by these reports as well. Thursday we will have jobless data and Friday we will have the GDP estimates. Currently the market is still under down trend since Aug 20 " Confirmed Down" by Vectorvest.

2. Today DOW plunged 134 points. A key critical factor is that the existing home sales plunged 27%. My thoughts on this: From last Friday we already know the home sale data will not be good today. That is why in my yesterday's blog I mentioned today's market will possibly down. But the 27% is way beyond expectation!!!!!! Crude futures also collapsed today. An noticeable phenomena currently is that : there is positive correlation between Stock and Oil price. Logic behind this is that if stock market is not good, it will have direct effects on the commodities.

3. My position: I was beaten down by the market!!! Even though the market is down, my position showed strong bullish today with a positive 3%.!!!! with increased volume compared to yesterday and it may seems to be still in the up channel. MACD is up, STO is almost topped, OBV is up channel. My previous strategy for this position is to hold extremely short time ,say 1 or 2 days, as far as the momentum disappear and the price retrace back, I will close the position. Currently it seems that it may maintain its up momentum for a while till it s topped. The current price is still at the UP BB edge.. Therefore, I am playing it a little bit aggressive now,, either hold it for more days or get rid of it tomorrow if the price gap up again or close green. I will keep it posted when situation confirmed the validation of "buy" signal or not.

4. It has been 4 days continuous down, tomorrow it may up.. Greater possibility. This Thursday will be pivot day according to Cobra.. ( maybe an important low day..) Let's watch.