May 5, 2012

Weekly review / Седмичен преглед

Short term view - short term bottom expected next week
Intermediate term view - we are in an intermediate term correction lasting till the second half June

McClellan Oscillator - I expect to see a divergence next week
McClellan Summation Index - will form a divergence next week
Weekly Stochastic of the Summation Index - already issued a buy signal
Bullish Percentage - still moving lower no signs of a reversal
Percent of Stocks above MA50 - probably we will see a divergence too
Fear Indicator VXO - will push to 22-24 end the move ends

Last week I have said that the next move lower should start - there we have it:). On Tuesday we saw fake move to suck in the most players on the wrong side and the market reversed.
Now I think that we will see a bottom next week and a rebound which will last longer than 4-5 days. Logical targets are reaction of the same size like the first one - 65 points or that means target ~1350 and the second target support ~1340(see the daily chart).
Short term - probably pause for a day or two to reset MACD and the histogram, followed by another move lower with divergence to finish this leg of the correction.
Daily chart - the histogram is bellow zero, several more days on the downside probably to support ~1340 and 23,6% Fibonacci retracement to form divergence and finish this move.
The big picture - I am still following two scenarios. The bullish one is the favorite one. The market is holding on brave for now so probably when we hit more significant bottom in June the prices will be above significant support ~1270(see the daily chart above) which is 38,2% Fibonacci retracement, EMA50 on the weekly chart and MA200 on the daily. If we breach this level than it gets dangerous for the bulls.

CYCLES (TD - trading days)
The small cycle(in red) lasts 18 trading days already. I think next week we will see the cycle bottoming.
This will be a bottom for the bigger cycle(in blue) too and we will see more significant rebound.
The biggest cycle(in red) points lower into second half of June.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
No trade-able Info - we have 1-2 from a sequential on the down side for now.

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