Market shot up higher after it has pull back, ‘thanks’ to the Russian news on war. In any case, the pull back is a buying opportunity as it caused VIX to be overbought favouring the bulls, at least for the short term. For the week of 10 Mar, let’s take a look its outlook based on the charts.
Monthly chart (which helps project the longer term perspective of the market trend – chart not shown this week) is up. RSI on both Dow and S&P not progressing nor retreating. Prices seemed to be moving UP slowly and steadily.
Weekly chart (which helps to project the mid term perspective of the market trend – as shown above) is up. RSI has pieced into the overbought zone. But not overly heated as yet, especially Dow. Potential divergence forming on MACDH but to be confirmed until we see negative histogram formed.
Daily chart (which helps to project the short term perspective of the market trend – as shown above) did a repeat of last week’s performance. Took a dive and eventually raised even higher. Still very oversold based on RSI.
VIX (Fear index) mid-term price retested its high and pulls back. VIX Short term price did exactly the same. Again now resting on no man’s land.
Long term (monthly chart):
Mid term (weekly chart):
Short term (daily chart):
Benefit of doubt remains with the bulls. But one has got to trade defensively in order not to get caught buying the high or shorting at the high. In times like this, I prefer to short when market gets a bit more overheated, or long when market gets into oversold zone.
If someone were to put a gun on my head for the market’s direction, the only clue i got was from daily chart, prices in overbought zone, and VIX daily price action seemed to suggest prices didn’t like its low which explains prices kept rallying off its low on the last trading day. Highly chance of another dip to be expected in the short term.
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NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice.