On Halloween, the S&P 500 Index (^SPX) closed the week forming a gravestone doji — a candle historically known for its ominous reputation. True to form, the market delivered a bearish follow-through the following week. For disciplined traders, the message remains unchanged: Manage risk, counsels Buff Dormeier, chief technical analyst at Kingsview Partners.
Yet just as the tombstone cast its shadow, a new pattern emerged – a potential shift in morale led by a dragonfly doji forming on the NYSE Advance-Decline Line. That signaled the possibility of a broader-based counterattack.
S&P 500 Index (^SPX)
The current theater suggests neither total victory nor defeat. The gravestone’s warning was heeded, yet the dragonfly’s wings hint at resilience. In military terms, the front has stabilized, creating an uneasy ceasefire.
Bottom line: Manage risk as commander of your forces, protecting capital first and advancing as conditions favor success. Markets, like battlefields, reward those who combine courage with caution, patience with preparation, and strategy with discipline.
