Is it a chance for the bulls to get on board with the pull back?
Monthly chart (which helps project the longer term perspective of the market trend – chart as shown above), both Dow and S&P are still on Uptrend. They can still this way in baby steps inching upwards for years before a solid down move hits. Let’s check the strength of this monthly up move using the shorter term views below.
Weekly chart (which helps to project the mid term perspective of the market trend – as shown above) shows the trend is still up. With last week’s price bar in the red, many would suspect for the market to retest its previous resistance level (Dow 16,500; S&P 1890). Let’s see the possibility of this dipper pull back from the daily perspective.
Daily chart (which helps to project the short term perspective of the market trend – as shown above) trend is DOWN. Reached oversold and last Friday might mark the start of the rally resuming. Short term resistance level which turns support was being tested as of last Friday.
VIX (Fear index) mid-term and daily chart has made its move. Especially on the daily as prices leaped back into the green box zone I have drew. It could be the bottom of the green box is now the new resistance.
Summary:
Long term (monthly chart):
UP
Mid term (weekly chart):
UP
Short term (daily chart):
DOWN but already tested its short term support. Bounce already happened. Unless no follow through.
Mid Term Fear:
Had gone lower and made its bounced.
Short Term Fear:
Support based formed and rallied to overbought on RSI and prices hits top of price envelop. Pull back already happened. Unless no follow through.
From my analysis, there’s no edge to the movement of what the market might do next. Dow, S&P and VIX all have made its moves and has reached its short term extremes. Everyone would be expecting a deeper pull back. But I suspect that will not happen. If the pullback happen now, seems too predictable. Market is not known to be that predictable and generous. If I am right, if you have gotten into the market, continue your ride. If I am wrong, great news. Prepare to take your positions.
Cheers
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NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice.
