S&P 500 Forms 'Doji' Candle After Rally, Signaling Possible Peak
-
The S&P 500 formed a "doji" candlestick pattern on Thursday and Friday, which can signal indecision and a potential reversal of a rally.
-
Doji patterns form when the opening and closing prices are very close, reflecting uncertainty in the market. They often emerge after a significant rise.
-
While not a guarantee, doji patterns can preview a shift in momentum, according to centuries-old Japanese candlestick charting techniques.
-
The recent doji comes after the S&P 500's strong 1.4% surge Wednesday, as investors bet the Fed won't just stop raising rates but cut them in 2023.
-
It remains to be seen if bulls can sustain the rally or if bears take over, depending on the Fed's ability to stick an economic "soft landing" with future rate cuts.