Tuesday, June 21, 2011

Nice bullish action, afternoon update

Second day in a row with market moving up. SPX managed to back into the downtrend channel and even more important it looks like is going to make a higher high on daily chart. Well... the day is not over but it looks promising.

EMAs are almost giving a buy signal on hourly chart but remember that they didn't work so well in the last two months giving at least 3 whip-saws so one should look on slighter longer time frame, either the same pair of EMas on 2 hours chart or EMA 50-EMA100 on hourly chart. This pair of EMA gave a correct "sell" signal around 1330 and did not give any false buy signal since then.The trouble with longer time frames is that they are "lazier" than the shorter ones and make you enter or exit the market a little bit late. EMa 25-EMA50 worked better than any other pair over a long period of time. Right now doesn't work so well but sooner than later we'll stick with this pair once again. I'll elaborate this subject later.

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