Weekly DMI turns green

I know what you think! It's odd that I am bringing up a bullish idea on a down day but this is a significant technical aspect on the long term time frame. If it's going to hold, this would technically put an end to the bearish cycle started on April. As you realize weekly DMI is not a good timing indicator, is quite slow from this point of view but rather a confirmation of a long term momentum.

On hourly chart we still have a bullish EMAs crossing. Priced slipped today bellow EMA25 but it finished above this level by the end of the day. Five days SMA is still rising and is now around 1155. This is a pretty important level since a move bellow 5 days SMA most of the time indicate a trend reversal at least on intermediate time frame. This level is usually crossed at the same time when the EMAs give a "sell" signal.

Now some news to cheer up the bears, actually not news but a potentially bearish pattern. It looks like a rising wedge is forming on daily chart. This is something one should have in mind. Last time we saw this pattern it turned out pretty ugly with SPX dropping from 1130 to 1040. However, this time around the technical conditions are not the same. Market is more bullish now, there is virtually no resistance from here to 1220 on any time frame and much more important weekly DMI turned positive. On August, when market climbed to 1130 weekly DMI was deep in the red, right now is positive for the first time since April.

babaro