Looking At The Market While Asian Trading Says SELL SELL SELL
Its been awhile since I’ve posted some technicals of the major indices. I’m taking a glance at the Dow futures right now while the Asian market is trading down more than 4%, and it looks like our bull market run is over. There’s some interesting chart patterns forming, though, in both the price action and the RSI.
Taking a glance at the relative strength index on the 1 hour chart I see neither overbought nor oversold, which actually surprises me after the violent rally from the recent bottom. The bottom was a perfect V with the descent nearly being equal in slope to that of the rally.
The RSI is showing a forming triangle pattern with RSI divergence to the price of the index. The consolidation at least for now, is officially over. In no way am I calling a top, we could still rally up once more, but I think short bets at this level will prove to be more than profitable.
Wall Street is finally sobering up and realizing that inflation can’t make the world turn and the economy grow.
It should come to no surprise that the rally began after the employment report and its falling ahead of an employment report. This is merely a bull move in a very bear market.
I think we’re going lower from here after we break this channel. Traders want profits bad, real bad, and its going to take a much larger consolidation before everyone gets on the gravy train again. A long term double bottom is in the works, at least as it appears now, pending the market doesn’t find a way to plunge through 6700. Fire up the shorts, there’s going to be some big money to be made soon.
Here is what I’m looking at right now, tell me what you think.
Click here to enlarge chart in new window, or click the image below.
I totally agree, downtrend is still intact. I have been telling friends I know who are still sitting on huge losses from 2008 that this is a great place to lighten up and get some powder dry to go to work when the real bottom is in. This is a huge V and markets rarely bottom in a V. Much more often a W is what occurs after a re-test of the lows. Great site, btw!