Want to know what happens when bullish belt holds go bad? Look at Figure 6-22. This figure is a chart of the futures contract that trades on soybeans. The bullish belt hold comes on the heels of some pretty bearish trading that occurred over the course of a few weeks. For the sake of full disclosure, I'll fess up and say that I actually traded this signal because I was looking for a short-term bottom and was encouraged by the price action of that day. However, I was a little less wealthy the next day because the signal failed. Happens to the best of us.
Bearish belt hold signals occur when there's an obvious uptrend with a day that opens on its high and closes very near its low. This signal appears as a dark candle with just a small part of the wick appearing on the bottom. It's a day when the bears rule for most of the day after being pushed around by the bulls for several days prior.
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