Checking out a successful bullish inverted hammer

Figure 7-11 is a chart of an ETF that focuses on financial stocks. The official name is the Financial Select Sector SPDR, and the symbol is XLF. I'm going to stick with XLF for simplicity's sake. The inverted hammer appears after a down day and is confirmed by a higher opening. I chose this specific chart because there's no question that the open on the day after the pattern confirms the bullish signal. If you see a bullish inverted hammer confirmed like this, you should put on a long trade quickly because an uptrend is likely on the way.

The bullish inverted hammer often appears, and the following day's open won't confirm the bullish signal. If you see that develop, wash your hands of any trades involving that pattern immediately.

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