📈 Side by Side Pattern 📉

Let’s take it back to the basics...

Back in the 18th century, Honma Munehisa, the father of candlestick charting, discovered that certain candle formations could predict the next day’s direction in the rice market.

Today, we know these as reversal or continuation patterns.

👉 Last week, at the close of the QQQ, we saw the formation of a “Side by Side” pattern.

I’ve traded this setup several times over the years, and it’s been one of the more reliable ones.

This pattern forms when two candles have nearly identical opens and closes, basically mirroring each other (of course, there will always be some differences between "the book" to "real market").

If the pattern plays out (meaning we break Friday’s low), we could be looking at the start of a downtrend.

Typically, the SBS is a continuation pattern, but in this case, it might be hinting at something different.

Either way, it’s worth keeping a close eye on this week.

- Michael Katz -