ANALYST: A 'Bearish Shooting Star' Is About To Emerge

Miller Tabak's chief technical market analyst Jonathan Krinsky alerts clients about a "bearish shooting star" that will emerge on the S&P 500 charts today if the index closes around current levels.

Here's Krinsky:

NYSE composite volume is running 9% above Tuesday’s pace. Breadth has moved from +1244 at 10:30 am, to negative 74 currently. Needless to say, that is quite a large reversal, especially after there were over 500 new 52 week highs today. Health Care is best +0.93%, while Utilities struggle down 0.46%.

With the pickup in volume, and the broad amount of new highs across individual names and sectors today, the close should be very important. Closing at current levels would leave many indices with bearish “shooting star” candles on the daily charts. Of course, we have seen over and over in this rally where one day’s bearish action has meant nothing more than that, just one day.

The chart below shows the bearish shooting star. The way these candlestick charts work, for those who aren't familiar: the bottom and top of the box formed by each candlestick represent the day's opening and closing prices, respectively, while the lines extending from the box represent the intraday range.

So, then, a bearish shooting star, according to StockCharts.com, is "a single day pattern that can appear in an uptrend. It opens higher, trades much higher, then closes near its open. It looks just like the Inverted Hammer except that it is bearish."

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