Well, we have experienced several spirited one day bounces since
the stock market correction started in late April. Today's pop
has better technical underpinnings, but it will just be another
temporary respite if we do not see some follow through over the
next several sessions. The boyz will be watching the overnight
action abroad and the US futures as the book gets moved. The
market closed today right at its downtrend line. It would have
been more bullish had it taken out the trend line. Moreover,
Friday could see some selling as some of the boyz net out for
fear that Upper Slobovia or some other EU province may
announce debt roll over concerns over the week end. Good
test of the market straight ahead....Chart.
1 comment:
Peter,
Your indicator's (RSI) and (MACD) both show bullish divergence on your chart. This is a good sign for a W bottom on this correction. We made a lower closing low in price without making a lower indicator low. The bottom of the hammer did not get violated (although close) which is another good sign. What worries me now is that sometimes I'll see bullish divergence make another trip. That would leave very little space between the bottom of the hammer on May 25th and the lower close on June 7th. On June 8th we came within a couple of points of that hammer bottom from May 25th. That tells me there is strong support just above 1040 for the $SPX. If it gets taken out, my thought is that a bear trap will be set. There are alot of stoploss orders set just below the 1040. I think the low volume today sucks. I'm with you we need to see some follow through.
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