DJIA closed on Friday with a hammer, according to Japanese candlestick charting. What's a hammer? From Stockchart, we learn that a hammer is
'(a) long lower shadow indicates that the Bears controlled the ball for part of the game, but lost control by the end and the Bulls made an impressive comeback' (
here).
'After a decline, the hammer's intraday low indicates that selling pressure remains. However, the strong close shows that buyers are starting to become active again. Further strength is required to provide bullish confirmation of this reversal pattern' (
here). Based on these, we may conclude that DJIA & the other US stock markets may have reach a temporary bottom. If the buyers come into the market strongly in the next few sessions, we may see a decent rebound in the US markets & possibly in other global markets. It is still too early to conclude that the sell-down in global equity markets has ended, but at least we may see a welcome respite for the next few days (or maybe a week or two).
I have appended below the daily chart of DJIA & the intra-day charts for DJIA, S&P500 & Nasdaq Composite.
Chart 1: DJIA's daily chart as at 5/2/2010 (Source: Stockcharts.com)Chart 2: DJIA, S&P500 & Nasdaq's intra-day chart as at 5/2/2010 (Source: Yahoo Finance)