Hope you have profited from the range before the election kick off last week. Right after the election, the market continued southwards. Let’s take a look at what the chart has to say about the outlook next week.
We are still in mid-term down trend, confirmed by EMA and RSI. Momentum is still favouring the bears from MACDH. Prices are near the bottom of its channel. For now, I see a support for Dow at 12300; S&P at 1305. As to how far can the market pull back, you may refer to my posting on 29 Oct http://strongerhead.com/strongerhead-weekly-financial-market-analysis-29-oct-2012/
On the daily chart, both the Dow and S&P, except prices are at the bottom of its channel, and RSI is in oversold territory, MACDH and EMA look to favour more downside. The bounce had already happened last Fri. If it doesn’t go higher, more downside expected next week.
VIX (fear index) is on a confirmed uptrend. But $19.50 – $20 will continue to act as a resistance. N the daily chart of VIX, there’s a MACDH div as prices getting higher, MACDH is seems be losing stream. Next week’s price action will tell us if the pull back is due on VIX. Meanwhile, we have to give the benefit of doubt that the VIX will continue to go higher.
Summary:
Mid term view:
Market is down and has stayed down for the 4th week.
Short term view:
Daily chart in oversold zone, but the downward trend had paused last Fri. Let’s see if it will continue to hold the move next week (which might happen base on VIX daily MACDH div and oversold Dow and S&P. Weekly might experience 5th candle reversal). If it does, we still have to follow the bigger trend that the move will continue downwards until our indicator(s) says otherwise.
NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice
