Tuesday, April 10, 2012

Nice confirmation

It's 2:20 pm and market seems to confirm the bearish trend started a few days ago. We may look at a decent correction here.

We have also the confirmation from 2 hours chart, EMAs also crossing and SPX bellow SMA 120.

Daily DMI it's deeply in red but weekly DMI is still positive. Once the weekly DMI is going to turn red we can talk about a change in trend on the long term time frame.

Let's see if bulls manage to do something by the end of the day.

4 pm update

Bulls could not do anything and bears win the day. This is the 5th day on the downside in a row. The next support level is around 1,345 the low we saw in March when we had the whipsaw. Market may initially bounce up a little bit from there. However, if SPX goes bellow 1,345 we may see a rapid drop to the next support level that is around around 1,280 (November's peak).

For now I am expecting market to calm down a little bit and allow the two EMAs to get closer to the price, meaning flat days, slightly positive or a little bit on the downside but not the magnitude we saw today. That's my guess based on previous market behavior.

Today starts the earnings season another reason the market will get volatile in the next few weeks.

Take care!


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