Friday, June 10, 2011

Market closes lower for the 6th straight week

All rallies proven to be counter rallies so far. The last two attempts did not even get to a proper Fib retrace or to the TA, so the overall picture continues to be bearish. I posted the short term trend change the day it reversed on 06/02 when the TA was at 1335 and the market has not been able to gain any significant bullish traction. However, volume is low, pessimism is at a high, the market is oversold, and 6 consecutive weeks of lower closes only serves as a recipe for a rally. So while we didn't see any meaningful rallies this week, I think we will see it next week. Also, it's worth pointing out that 6 weeks this bearish wave has yet to actually done a Fib retrace of the wave from 1040. Technically speaking, this wave should do a Fib retrace at some point and the area that would satisfy this retrace is 1166-1245. I am inclined to think we will see one more high before this retrace happens but we could well be on our way to that area right now. Until then, I am staying long with my long term portfolio and not taking any other new positions until the trend gives us a green signal.

Have a Great Weekend!

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