Stock Market Analysis

Wednesday, June 10, 2015

A bullish day...

Even though the market closed marginally negative today, I would still say that this is the first strong bullish day since this drop begun last month. There was plenty of buying throughout the day as investors see value at this level. Some profit taking is evident towards the end of the day but the rise in bond yields across the board and the drop in total equities put call ratio back down in favor of call options trading still made this a negative day with a strong bullish undercurrent.

Looking at the candlesticks charts show dragon tail formations across major indices, which is a very strong pivot formation especially with it occurring around the 100MA.  Even though this formation is a high probability pivot formation, the problem is always the 30MA that hung overhead forming the first resistance level. This is going to be rather tricky especially with the current market condition. The next two days will be critical... if the SP-500 breaks the 30MA, then we could be looking at a new high coming, if it as much as close negative on the 30MA line, we could be looking at a strong intermediate correction like in October 2014.

For now, the Dow remains in short term neutral trend within an intermediate and primary bull trend.


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