Yesterday's candle was an "Inside Day".
Inside days take place when the high is lower than the previous day's highs and lows are above the previous day's low, representing a period of consolidation and lower volatility.This pattern often occurs after the end of a price move, where prices have reached a point where buyers (in an uptrend) or sellers (in a downtrend) are already in and the price has moved too far to attract more buyers/sellers. Inside days may indicate a change of direction.
This has been often seen in the case of the S&P. The pattern has led to a stalling of the downmove and then a resumption of the upmove on past three occasions , shown in red elipse on the chart. Will the pattern prove bullish this time too?
Ideally, wait for the break of the high or low of the Inside day pattern, which is 1280.91 and 1249.05 for the S&P, to set the further direction.
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