Nice rally on the first trading day last week, which offered good shorting opportunity as discussed last week (http://strongerhead.com/?p=2909). The nasty two days of bearish move on Tue and Wed presented nice profit for the shorties before it vanishes by Fri. I took mine only on Friday as I got stopped out by the price big gapped up. This reminded me that I have to be quick and never overstay trades. Since mine is a short term trade (a week), should have run earlier as the trend slows on Thurs.
How’s the market looking this week? Let’s take a look at charts.
The monthly charts (not shown here) is still up. Long term trend is up.
The weekly charts, so long the moving averages hasn’t crossed, I would have to assume the price action in the last two weeks is just a dip from the longer term uptrend.
On the daily, whenever prices touches the bottom of the chart as RSI went oversold below 25 and rebound, at least a short term rally in favour of the bulls can be expected. This has happened 5 times in the last one year (as marked by the blue vertical bars on the chart above). Let’s see if it will happen again this time around.
VIX (fear index) weekly RSI hit the edge of the overbought line and prices came crashing back down.
VIX daily price rally above the green box, touched the red zone and came back into the edge of the green box. VIX resumes its short term down trend. But be another attempt to spike, and if it fails, you know who is firmly in charge again.
Summary:
Midterm view:
Trend is UP.
Short term view:
Trend has turned back up. Some pull back after last Friday’s up run would be considered normal unless prices breaks and stays below 1624 (S&P). If my signal works, a rally back to near the up edge of its price envelop would be expected.
Cheers
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NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice.
