Monday, January 31, 2011

Downtrend Intact but..

The market retraced to the minimum expected Fibonacci level and if the bearish count is correct, we should see continued selling tomorrow or Wednesday. The market tested the trend average as expected (which is currently 1287) and closed below this number so I am assuming the bearish wave will continue. However, we do need another decisive sell off to break 1271 to confirm and we can not have any closes over 1287 as that would start changing the trend to the positive side.

As far as news is concerned, the catalyst for the current sell of is Egypt and that situation remains largely unresolved as reflected in Oil prices. There will be a big march tomorrow so we'll see how the market deals with the news. Technically speaking, this should serve as a good excuse for a big sell off but who knows in this mania driven market. I will cover shorts at any sign of the bearish trend turning positive again.

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