The SP 500 completed a Daily Butterfly sell pattern. This is a longer time frame which means this pattern can take some time to play out. There was also an upside breakout failure in yesterdays trading which led to one of the first weak closes the market has seen in awhile. For more information on the Buttefly pattern please refer to ‘Trade What You See - How to Profit from Pattern Recognition.

“When a period of loss does happen, the trader must continue studying the method to learn how to trade through those periods. Unfortunately, it is at this point that the vast majority of traders learning the method will abandon it and search for a method that does not incur inevitable drawdown. It is learning to manage the risk and losses during periods of drawdown that will eventually make a profound positive impact on the bottom line.”

Trade What You See – How to Profit from Pattern Recognition
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