TECHNICAL ANALYSIS
The market average continues its 2 month range pattern notwithstanding the 2 day rally. There's nothing much to read into any of the higher or lower peaks or troughs as long as it remains within the consolidation range. There does appear to be a divergence between the troughs of the price vs. the stochastic and the macd, but take it for what it is - an alert - its not a buy signal unless price follows eventually, so I won't get too excited about it. Now, what to make of the 2 day rally in the near term? Well, it's any of 3 things: (1) it marks the start of a new upleg which breaks above the minor resistance of 8831 qualifying for a short term uptrend due to the higher low of 8141 in which case the immediate price objective will be 9653, (2) it is merely an extension of a new downleg that started when the index made a lower peak of 8831 and will reverse into a decline without breaking above that level-intermediateTP for this scenario is7449, or (3) it will further compress into a narrower range sideways. My personal sentiment is that the sideways movement will continue into the near term. If i had to choose a direction where the range pattern subsequently breaks, for now, I would have to say that it will be to the downside (a) judging by the way volume has been behaving recently, and (b) considering that the larger primary and intermediate trends remain downtrending. SELL.
NEWS
AP Stocks finish higher despite dismal economic data Wed Dec 3, 5:48 pm ET
Reuters Wall Street jumps on Coke and other defensive plays Wed Dec 3, 2008 5:10pm
CNN Stocks gain for 2nd session Dec 3, 2008: 4:19 PM ET
The market average continues its 2 month range pattern notwithstanding the 2 day rally. There's nothing much to read into any of the higher or lower peaks or troughs as long as it remains within the consolidation range. There does appear to be a divergence between the troughs of the price vs. the stochastic and the macd, but take it for what it is - an alert - its not a buy signal unless price follows eventually, so I won't get too excited about it. Now, what to make of the 2 day rally in the near term? Well, it's any of 3 things: (1) it marks the start of a new upleg which breaks above the minor resistance of 8831 qualifying for a short term uptrend due to the higher low of 8141 in which case the immediate price objective will be 9653, (2) it is merely an extension of a new downleg that started when the index made a lower peak of 8831 and will reverse into a decline without breaking above that level-intermediateTP for this scenario is7449, or (3) it will further compress into a narrower range sideways. My personal sentiment is that the sideways movement will continue into the near term. If i had to choose a direction where the range pattern subsequently breaks, for now, I would have to say that it will be to the downside (a) judging by the way volume has been behaving recently, and (b) considering that the larger primary and intermediate trends remain downtrending. SELL.
NEWS
AP Stocks finish higher despite dismal economic data Wed Dec 3, 5:48 pm ET
Reuters Wall Street jumps on Coke and other defensive plays Wed Dec 3, 2008 5:10pm
CNN Stocks gain for 2nd session Dec 3, 2008: 4:19 PM ET
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