What started off as a strong move higher today with a slight gap at the open, ended with price filling the opening gap and finishing in the red for the day. In the process, SPY has put in an outside reversal, or bearish engulfing candle, which eclipsed the three prior daily candles. When the body of the current daily candle engulfs the previous daily candle it is called an engulfing candle, and on a down day like today it is a bearish engulfing candle. Since price also eclipsed the two daily candles prior to yesterdays candle it is called a bearish engulfing plus two candle(BE2). The more candles that are engulfed the more negative or bearish you can consider the candle and outlook. This BE2 also occurred near the apex of a rising wedge pattern which tend to be bearish patterns on their own that lead to downside moves in price.
Be careful out there, raising your stop-loss orders on long trades isn't a bad idea here, especially if you are in the green and want to lock in some profit.
Be careful out there, raising your stop-loss orders on long trades isn't a bad idea here, especially if you are in the green and want to lock in some profit.