For the Bulls: The bulls got the best close they can imagine. Not only did we get an intraday test at the key resistance levels, we also got a close above key levels on all major indexes. A close at 9300 for the DOW would have made this a clean sweep for the bulls on all indexes, however 9286 is close enough.
For the bears: The bears have time on their side at this point, while we continue trading higher this is occurring on lower and lower volume while at the same time showing technical patterns of indecision even with new highs. Due to the total lack of selling and/or profit taking any bear has no choice but to stand on the sidelines and wait for either downside confirmations which must come with a test of 956-970 with a failed re-attempt of the highs at 984-989. Otherwise its just waiting game for the DOW 9400 and SPX 1014. The only other comforting fact is that we just passed an important time cycle that had a top on Friday. As you can see those fib time lines have been very accurate thus far. The question remains whether we continue in a sideways fashion here all the way until 150-161.8% or we retrace.
By the way - loving forex. Even with the dollar craze we have had its a much easier market to trade. Currently in 6 different positions (all small in size with 1-2 contracts each) with a mixture of long and shorts.
Chris, what if the pull back contnues beyond 956 -- say 920 or 910 area. Would you still be looking for a failed retest of 989 to confirm the end of the rally?
ReplyDeleteLets first focus on a simple retracement to 970 lol. If we ever get that. Once that is in we can make a call there. If we do end up going lower we have to decide then what to make of it.
ReplyDeleteIts quite difficult to say at the moment. Many are saying this is not just a bear market rally anymore and we go higher - a lot higher. 4 months of upside seems to be confirming that. Yes we are still bound by major trend lines now but those will resolve by the end of the month.
Quite difficult to call, if this was a normal bear market rally to resume the primary down trend it should have already occurred. Even if I stretch all my time cycles it should have ended in July. We are now in august with a new high - cannot ignore that sign unfortunately.