A strong 200-point rally today on ordinary volume may have completed a limited two-day rebound. At 11,100, a visit to the recent Head & Shoulders neckline is met with the nearby 38.2% Fibonacci retracement level from the selloff high. This point may provide short-term resistance which could be a good entry point to short positions. The chart below may suggest that short-term resistance could be encountered sooner at around 11,050. The selloff that began month ago has created a downtrend channel; the current upside resistance of the channel is at 11,050 where it meets the Bollinger midpoint. So, a number of resistance levels here, in summary: Bollinger midpoint and current upside resistance of downtrend channel at 11,050, next, 38.2% Fibonacci advancement level from the selloff lows at 11,068 and finally 11,100 neckline level of the recent Head & Shoulders. The average of these resistance levels is 11,075. A break and close tomorrow above 11,100 should see a follow-through rally into next week testing the 50-day moving average at around 11,225. Otherwise, a selloff tomorrow at the discussed resistance levels bodes for more range-bound declines next week within the downtrend channel.
1 comment:
it is unbelieveable that the bulls managed to drive up the prices, it was somewhat inevitable with the huge downspin, but does anyone still think, that NOTHING HAS CHANGED, the FED has now all but certain to increase rates, housing is still going to suffer, and commodities are at all time highs
The economy, and the markets thrive on housing, and commodities, and we have found ourselves in a situation where things have not changed.
Technically, I would not be surprised to see a sell off tomorrow. the puts are in place, and Im just waiting to fish in the profits.
How many sites have you read where the Bear Market (dreaded words to those buy and hold investors), is starting to loom over the markets?
just too many to count.
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