Tuesday, May 17, 2011

Counter Rally Coming

The market held the 1317 support level and there is a bullish crossover on the MACD in an oversold condition. So I wouldn't be surprised if we get a gap up or a rally tomorrow. However, in order for this rally to become something more than a counter rally, the market needs to overtake the TA at 1340 and close above it. The short term is bearish and the intermediate has turned neutral leaning bearish so the coming rally should give us more clarity on where the markets are headed next. If I am wrong on the rally, the 1317 support level needs to hold and if that is broken then expect I expect 1309 to be tested. I have my long positions and will be watching the coming bullish wave for volume and other clues to see if we are on our way up or more corrective waves.

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