Last week 24 Mar analysis, we said bears were looking dangerous. But not dangerous enough to push the market lower despite several battles fought between the bulls and bears creating a volatile trading week which ended only slightly in the red. What might be the outlook for April?
Monthly chart (which helps project the longer term perspective of the market trend – chart as shown above), for both Dow and S&P kicked off April in bearish mode. A few more weeks to complete the candle stick for April (which supposedly is one of the most bullish months based on historical records). How likely will it close in the green for April? Let’s look at the shorter time frames for clues.
Weekly chart (which helps to project the mid term perspective of the market trend – as shown above) did a false upside breakout with an ugly display of tail which reads as market rejected the high. In another words, “the market does not wish to go higher” kind of sign.
Daily chart (which helps to project the short term perspective of the market trend – as shown above) rejected its low, with its immediate support at 1855 (for S&P). This support must hold for short term up trend to stay intact. Will it hold? Let’s check the fear indicator on how much strength do the bears has.
VIX (Fear index) mid-term and short term price did a false downside breakout, and now sitting above its support zone again (the temporary short horizontal green line).
Long term (monthly chart):
Still UP. But started in the red.
Mid term (weekly chart):
Still UP. Showed a false upside breakout.
Short term (daily chart):
Neutral. Failed to hold above resistance level.
I’m still troubled by these price action. If VIX short term break below the green horizontal support line, Dow and S&P break and hold above its resistance, then I would change my mind.
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NOTE: All information provided “as is” for informational purposes only, not intended for trading purposes or advice.