Wednesday, June 27, 2012

Trend Average Resistance

I made a mistake yesterday in posting that 1324 was a 38.2% retrace. I moved one of the Fib retracement tools on the chart by mistake so that level was not the right one. The correct 38.2% retracement is 1330 and today we saw the market go into Fib retracement territory and almost testing the Trend Average which is still 1336. So unless the market manages to close convincingly above it, we'll probably see a 30-40 point move to the downside once the bounce wave is over which would test the 1300-1310 support area. So the suspense continues.. I continue to be long but hedging on the overbought extremes. I am not sure what will do it but I get the feeling the market will continue to rally eventually to new highs before a any substantial bearish wave.

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