Dec 4, 2011

Weekly review / Седмичен преглед

Well strong week, the reversal was not a surprise but the speed was. SP500 hit my first target for 3 days - 3% gap and 4% panic buying.... definitely you will not see such moves often. So I raised my target - 1300 to 1320

The adjusted plan looks like this - 2-3 days pullback which should find support at ~1220 and then continuing higher to the target zone 1300-1320 (it depends on if want to include or exclude the shadows for this trend lines).
Alternate scenario is going even higher.If you project a measured move the target is 1376 or challenging the last high at 1370, but everything with the time... step by step lets see first the pullback and then the speed of the move after that.

Closer look at the hourly chart and possible path of the next moves.
1220 is very very important level - 38,2% Fibo retracement, support, test of a broken trend line, the half of the 4% Marubozu candle from Wednesday.
When you have such strong day 4% and Marubozu candle(candle without shadows) subsequent pullback should not exceed half of the candle. You have a panic buying and buyers should stay buyers and not sell their positions. If the price closes bellow the half of the candle there is very high probability that this was a fake move. The numbers from Wednesday low 1197, high 1247, candle size 50 points,the half is 25 points or the line in the sand is 1222.
If SP500 close bellow that level,cluster of strong support, the next target is 61,8% Fibo retracement and support level ~1190-1195. That will mean weakness and any subsequent rally will not reach the target, probably will stall at the previous minor highs ~1270-1275 or ~1290.

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