Jul 18, 2010

Weekly review / Седмичен преглед

Hello traders!!!!!
Last week forecast was for a UP to resistance ~10330 followed by a pullback to support levels 10190 or 10090.
And exactly that happen - DJ overshooted the 10330 level and found resistance at the MA200 and the trend line. After that we saw a sell off to 10090 - minor support level and 38,2 retracement of the previous move.
It is difficult to forecast this market but it has played out pretty good this last week:)

So what now? ... I do not know, so simple, is not it:)))
My primary view was, that we will see higher prices after a pullback. But this very long candle with high volume does not look like a pullback rather like the beginning of a new down move.
- Histogram has turned slope downward - mMm pattern
- Long red candle with high volume ignites selling
- Prices finding resistance at the trend line, MA200
That is bearish and we should follow the market until it say us something different. So my primary view is now bearish. Look at the first two charts. Short term we can see some relief at the start of the week before going lower see (the 15-min chart), or just continue lower and never look back if this is really third of a third wave. Next week we should close lower or this scenario is dead and the alternate scenario below will become primary.

Alternate Scenario
The third and forth chart present the alternate scenario. The problem is that everybody are focused on the H&S pattern, the blogs a full of bearish counts and the market does not do what everybody expect. So this scenario is bearish too and I expect a correction and very week autumn, but before that the market will fool both bulls and bears and make them scratching their heads asking them selfs what is going on.
Keep an eye on this charts. Next week we should not close lower if this is the real story.

Bullish scenario if we go lower for several weeks but the market make higher low and break the trend line. Than we will have bullish falling wedge followed by a new UP leg making new highs for the year.

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