Earlier this month, Bank Of America head technical analyst said that the market could correct 10%. That means the DOW will be back in the 9800 territory.
The market obviously ignored such warnings as Bernanke free money will offset such ridiculous technical patterns that many do not want to believe.
Here I will present another technical picture. We know that technicals may not be that effective, however it does add color to our trading.
In the DOW chart above, we see signs of market peak. The first sign being the candle formed yesterday (almost shooting star … ). The move yesterday showed that the market wanted to go higher, but buyers were exhausted and the market could not close at its high as sellers were present up there.
Today’s candle shows that there is some fear. The market sold off steadily throughout the day, signalling that funds are selling shares using VWAP.
Then at the end of the day, we see a huge buying demand. This could mean that some new comers are entering the market, and most probably short traders are taking profits.
This means there is uncertainty. Shorts are unsure if the market can continue southwards.
However, the fact that the market saw a sell off in the morning over a measly job picture showed that there is definitely some selling pressure now. And any shaky events will spark a sharp sell off tomorrow.
What can continue this rally for now??? Extremely positive GE earnings.
For now, the market seems to want to head south. At least 10500 is in sight. If Bank Of America technical analysts are right, then we will be in for another panic session.
We need to wait for BIG BEN to save america.
2 comments:
Cover your short positions right now because Big Ben is coming to town.....Santa Claus is coming to America.....
Haha. I dun have anymore short positions. But I am still riding my PROSHORTS with a stop loss that is already in the money. Meaning that I will profit even if this stop loss is hit.
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