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Today´s Outlook
- Bullish %: not important right now
- Current reading is 14, which puts us back at neutral
Weekly Outlook
On Monday you have the daily and weekly in down trends; lower high, lower low. Friday was a doji which means to be prepared for a change in direction. On Friday the DI signaled a BUY. This makes sense as the beginning of the week in a downtrend should try for higher prices to be sold into later in the week. The weekly had a high of 1098.50; obviously you don’t want to exceed that high if the downtrend is to continue.
The limit to the weeks upside should be 1090 and 1097. Late week we will see if they sell it off again. Downside potential is 1066 and 1052. If 1052 breaks the Hindenburg is probably kicking in but with that signal so publicized I strongly doubt you’ll see that response until further upside is in.
Analysis
Ok so price went for the 1035 first and is now headed on a buy signal to the 1066 area. No problem.
We do not want to lose 1052 off the midpoint chart. ALL six sectors I follow are at their bounce point after yesterday’s close.
Then there has been very little movement since the initial one day 1000 point plunge in the Dow. The pattern we see today is identical to the September/October banking crisis crash. In both situations STABILIZATION has been the primary focus of the markets. The last leg down, which is a declining wedge, has been on extremely low volume. This is a prime candidate for a rally.
Many have asked about the Hindenburg Omen sell signal, so for those of you that are interested in learning more, please read about it through this link: http://en.wikipedia.org/wiki/Hindenburg_Omen. It has been updated quite a bit since the last time I visited that page, so it is clear that somebody cares to make posts there to update it, including mention of the signal that occurred on Aug. 12.
If we look ahead and if I try to make any projections on how this can develop, then this is what we get:
A soon to come rally would full file my yearly projection. It means that further downside may indeed be limited until the end of year, which means a projected PLUNGE after the November elections.
After the extreme fall in 2011 the market will signal an all clear into 2012. This means that there should be one last rally attempt and then a precipitous fall that just keeps going. In other words the Hindenburg is still in front of us.
Good luck with your trading! |
