The market counter-rallied today as I suspected and fell short of yesterday's high before heading back down and closing under the Trend Average. This close turns the short term trend bearish and this increases the chances of lower lows next week. With that said, oil has been rallying and this has provided an excuse for equity buyers to come out. Since there is a high possibility oil is headed back towards a test of its most recent high, it's hard to see how bearish momentum could gain speed while energy shares rally. Also, I found the bounce off the 2044 support a bit suspicious as this leaves a bullish set up going into next week. So I turned cautious towards the EOD and ended up closing the rest of my shorts to avoid any surprises on Monday. I'll re-short if resistance levels are tested again or go long on a test of the 200 DMA/2022.
Have a great weekend!
For an more elaborate analysis of the current wave please visit http://www.ewaveanalytics.com The current rally in equities and oil was called almost perfectly over a month ago on that site.
Short Term Trend = Bearish
Medium Term Trend = Bullish
Long Term Trend = Bearish trend being challenged
* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.
No comments:
Post a Comment