Oct 17, 2010

Hello traders!!!
I was expecting correction but the market wanted to do something different:)
Dow Jones has risen for the last two weeks but the technical picture has not changed a lot, just the divergences are better defined.
Look at the first three charts - I expect to see higher prices on Monday and triple divergence on the Histogram on hourly chart. We have already divergences on the daily chart. NYSE McClellan Oscillator shows multiple divergence too, fewer stocks are participating in the rally.
When I see this charts the long side does not look so attractive, may be day trade Monday but that is all. I expect a correction with a target 38,2% around 10700. If we are in a bullish leg we will find support at this level and continue higher.
The long term picture - the last two charts are looking still bullish no bear signs. So we should stay bullish and expect just a correction, until the market shows us the opposite.
But stay cautious, if we see violent sell off than something else is going on.

No comments:

Post a Comment