The Psychology
In an uptrend or within a bounce of a downtrend, a bearish Engulfing pattern forms. By itself this pattern has moderate reliability as a reversal indicator, but when the it is followed by another black day (preferably on strong volume), the overall pattern becomes much more reliable.
The bearish Three Outside Down is a continuation of the bearish Engulfing.
If I can get a good fill I am going to sell a January call spread 75-80 sometime today.
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