More Indications Of Bearishness...
Hey, what am I saying bearishness when the market is up today (and talking bullishness when the market is down??)?? What is wrong with me? Before you swallow me up, look at this... look at the candle for the Dow today... it is another up candle which failed to make a new high against the big down candle prior to it! In fact, after market futures slowed down tremendously too. Volume is slightly higher than yesterday but nothing to show for. In fact, even if the market goes into a reaction rally right now for a couple of days, it is hard to see a turn around immediately because we are simply not witnessing a selling climax yet! All turn arounds are marked by selling climaxes manifested in a few guises but we are not seeing any of those yet. In fact, what I am seeing is a resilient battle between the bulls and bears with no strong indications that the bears are retreating at all. I would hope to see a few quick and dirty drops, probably to the August low of 12500, climax and then turn around the classic textbook way. I am still for a strong US market in the years to come and, recession? What recession?
Dow Technical Chart By Best Charting Software TC2007!
Dow Technical Chart By Best Charting Software TC2007!
Labels: fundamental analysis, technical analysis
posted by Jason Ng at 4:32 PM
2 Comments:
Agree with you Jason about the battle between the bulls and the bears. The Dow Composite held support. An interesting thing to look at is the Pro Shares short funds, for example DOG (short Dow 30 ETF). There is negative divergence in Stochastics and RSI, but positive divergence in ADX/DMI. Also, there is a break in the upward trend of OBV so I see money coming out of the short funds. So in the the short term, I see a bit of a recovery in the market in the but I think it will be sideways at best. Retail investors have been burned and are more cautious now and I think we'll see more news-based volatility.
Another thing to note is that up until a few weeks ago, the dollar was in free fall as it appeared that only the US was suffering but the reality is that weakness was beginning to show in Europe and especially the UK with their rising currencies beginning to cause pain. So the investors that previously feared the US economy and fled to Canada, UK, Europe and Australia, are now finding that maybe the grass isn't that much greener on the other side of the fence.
Economic news on both sides of the oceans will drive the market and we'll probably see a whipsaw action for some time.
I so totally agree with you and supports the angles from which you approach market analysis. :)
I think the big question for all technicians now is whether or not the Dow would survive the coming reaction rally... new highs or a ditch to new lows.
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