Weekly review / Седмичен преглед

The rebound of oversold levels lasted longer then expected and now is difficult to say which scenario will play out. I have shown them on the first two charts. I can show enough technical indications for both cases - bullish and bearish.

Looking with the eyes of a bull I would say that DJ has formed a channel and the correction is over.
Looking with the eyes of a bear I would say DJ has broken the trend line and retested it.

I say let us think like a trader and try to squeeze a gain. That means do not get emotional and keep an eye on both options.
Look at the third chart - I think this UP move needs a pause. The next move will be down and it will tell us which scenario is unfolding. I expect at least 50% correction.

Weekly review / Седмичен преглед

Short term update

Traders are scared because of what is happening in Japan.
DJ has hit the target ~11750 and finds support for now.
I think the correction will be deeper. Watch die other targets 38,2% and 50% retracement since the bottom in July.
( the white labels 38,2% and 50% are the retracement since the last low in December )


I think the scenario with correction hitting 38,2% retracement(~11250 to ~11400) has higher probability.
All indicators daily,weekly,market breadth are pointing down. No signs of bottoming.
I expect bounce to relief the oversold conditions.

Weekly review / Седмичен преглед

I think the correction will last another 2-3 weeks and DJ will hit the 23,6% Fibonacci level around 11750 points.
Like every correction its very tricky and difficult to trade. I think the next one or two days will be green and then we will see another seloff.