Thursday, May 10, 2012

The market seems to have a hard time bouncing and I think we should start seeing the B wave tomorrow before get get another counter rally to the Fib retracement area. Interesting how the mood in the market changed in just one week, last week I was expecting the bullish waves to continue and what started as a correction ended up being a sell off. But that's why the Trend Avg exists, to keep us aware of where the market is likely to go. As of today the TA is 1379 and dropping and while the market is taking its time to rebound, we will see a counter rally to test the TA sooner or later. If the 1343 low holds then there is a good chance we'll bounce to the Fib retracement territory. At this point a test of the 50 day MA is looking unlikely but if we get there, that'd be a good spot get short/sell longs. Also, while sentiment has turned bearish, keep in mind the market rallied for several months without any significant corrections. So in the bigger picture, the market is just taking a breather before going to new highs.

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