Trend keep denying the bears. Bulls are getting bullish. Is it time to get fearful when others are greedy? Let’s look at the charts.
Monthly chart (which helps project the longer term perspective of the market trend – chart as shown above), both Dow and S&P are in a tight range. Trend is still UP.
Weekly chart (which helps to project the mid term perspective of the market trend – as shown above) is trending side ways, but as of 23 May, prices sitting on resistance level, will it hold? Let’s take a look at the dailies for clues.
Daily chart (which helps to project the short term perspective of the market trend – as shown above) has moved and stayed above the resistance level I had drew on 11 Apr. Prices about to hit oversold territory on RSI. Trend is UP.
VIX (Fear index) mid-term has sitting on major support. On VIX daily chart, it broke down slightly below the green box zone, with RSI signalling oversold condition brewing.
Summary:
Long term (monthly chart):
UP
Mid term (weekly chart):
Neutral (moving sideways)
Short term (daily chart):
UP
Mid Term Fear:
Low but some room to go deeper into oversold
Short Term Fear
Low but some room to go deeper into oversold
Many people must be feeling greedy. Market lacking fear at the present moment. VIX should be fighting back, which means market should pull back. However, the top is harder to catch as greed usually has more legs than fear. I suspect a pullback will likely to occur when all three time frames pointing UP deep into overbought with VIX weekly deeper into oversold. Thus, I’ve included fear indicator in the summary section as reference to overall picture.
If you must trade, follow the tide and long but be sure to run with a tighter stop and smaller trading positions as risk is higher at the moment.
Cheers
Strongerhead ways to becoming a better trader
NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice.
